According to the Australian Energy Regulator’s (AER) flagship State of the Energy Market Report 2025, Australia’s energy markets are in the midst of a major transition driven by decarbonisation, the decentralisation of energy services, and new technology.
AER chair Clare Savage said the profile of energy generation in Australia had changed significantly over the past decade, with 2024 being a notable year.
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“In 2024, over 5GW of new solar, wind, battery and gas capacity entered the National Electricity Market (NEM)—the largest annual new entry of capacity since the NEM began in 1998.
“By the end of the year, renewable technologies including rooftop solar, solar farms, wind, hydro and batteries made up 60% of the National Electricity Market’s generation capacity and contributed 39% of generation output, representing a significant increase over the past decade,” Savage said.
During 2024, new records were also set for rooftop solar output (which increased by 13% to 23GW) and the number of home batteries installed (a 62% increase compared with 2023).
The report shows that in this evolving system, the complex relationships between weather conditions, shifting energy demand, coal generator and network outages, and different generation types are resulting in increased price volatility in the wholesale energy market.
And while the wholesale market has been changing, energy customers have also changed their behaviour—consuming less electricity from the grid across the middle of the day, being more energy efficient, and sourcing their own power through rooftop solar systems and home batteries.
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“As the system continues to evolve consumer energy resources must be effectively integrated and coordinated to help achieve a least-cost transition, with networks evolving to support these new energy services and ensuring they are utilising their full capacity,” Savage said.
Read the full report here.
