Australia’s wholesale electricity prices have eased from the extreme levels of 2022 but are increasingly volatile, according to the Australian Energy Regulator’s (AER) State of the Energy Market 2024 report.
The report covers key trends and developments in the gas and electricity markets, documenting the end-to-end operation of Australia’s energy markets.
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The energy regulator says weather conditions and outages at both generator and network levels during high demand periods contributed to market volatility. The market experienced record low electricity demand in New South Wales, Victoria, South Australia and Tasmania, but also record high demand in Queensland.
Collectively, consumers have become an even more integral part of the energy transition through their investment in rooftop solar, batteries and electric vehicles, with residential solar in the National Electricity Market (NEM) now exceeding 20GW—a 2.9GW increase on the previous year.
AER chair Clare Savage says with the sector changing so fast, the importance of efficiency in the energy system has never been more critical.
“We’re calling for a renewed focus on network utilisation and improved efficiency—for industry to look for ways to more effectively use the existing network before investing in new assets,” Savage says.
“Now is the time to get creative. Regulatory sandboxing tools such as the Energy Innovation Toolkit are available to allow for the trialling of innovative approaches to new products and services that will deliver greater choice and cheaper energy options for consumers.
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“As technology evolves and the sector innovates, consumer protections must also be designed to support an energy system where consumers can use multiple energy services to consume, trade and produce energy. We’ve presented detailed analysis on this issue to Energy Ministers and look forward to seeing this progressed as part of the National Consumer Energy Resources Roadmap.”
Significant shifts have also been observed in gas markets. While gas will continue to play a role supporting electricity reliability and large industry for some time, the report highlights further moves towards the electrification of domestic gases over the past 12 months.
