The Energy Security Board (EBS) has released the Post-2025 Market Design Directions Paper for the National Electricity Market (NEM) which sets out the market reforms the ESB will pursue.
The paper includes an increased focus on addressing the risks to reliability, security and affordability of a sudden and unexpected exit of a thermal generator.
Minister for Energy and Emissions Reduction, the Hon. Angus Taylor, said it is an important step towards developing a new fit-for-purpose market framework that will empower consumers and support the continued reliability of the interconnected system.
“The NEM is at a turning point, with expanding choices, new technologies and large-scale replacement of thermal generation needed as older power stations leave the market,” Minister Taylor said.
“Taking action now is critical and will minimise disruptions, and avoid unintended consequences.”
“The record levels of intermittent generation along with major thermal generator closures demands a clear focus on reliability and investment in reliable generation.”
“The NEM needs to adapt to address risks to reliability, security and affordability, particularly sudden, unexpected exits of thermal generators. We need long-term signals for private sector investment in reliable generation and storage, to replace existing generators with like for like capacity,” Minister Taylor said.
“We need a coordinated approach to market design to keep the lights on and costs down. The commitment of all energy Ministers to the post-2025 process recognises the importance of working together.”
“I look forward to continuing to work with my state and territory colleagues to progress the post-2025 market design that delivers for Australians,” he added.
The NEM plays a key role in Australia’s energy system, delivering electricity to consumers across New South Wales, Victoria, Queensland, South Australia, Tasmania and the ACT.
The ESB will work with stakeholders to develop the detailed market design ahead of further consultation in March.
Final recommendations on post-2025 market design are expected to be delivered to energy ministers in mid-2021.
The ESB’s Post-2025 Market Design Directions Paper can be found here.
