Integration of variable renewable energy (VRE) like solar generation and consumer energy resources (CER) like rooftop solar are among the biggest catalysts of change to the National Electricity Market (NEM), which the draft wholesale markets setting review (Review), now open for public feedback, aims to address, through nine recommendations.
The Review outlines opportunities to reform increased CER visibility in the wholesale market, and without proper integration address risks to system stability potentially caused by the millions of new, small-scale solar and battery systems, which the Review describes as ‘hidden participants’ not always visible to the market operator.
Recommendations includes requiring a broader range of price-responsive resources to be visible or dispatchable (Recommendation 2) and focusing government efforts on facilitating market participation for consumers with CER (Recommendation 3).
The proposed new electricity services entry mechanism (ESEM), to facilitate new investment is also designed to be open to aggregators of CER to support long-term investment.
Image: National Electricity Market wholesale market settings review Panel
NEW Review Chair Associate Professor Tim Nelson said getting the right market settings in place means delivering a secure, affordable, low-emissions electricity system that works better for everyone.
“Our draft report makes nine major recommendations aimed at re-establishing the NEM’s core strengths: efficient markets to guide investment decisions, efficient dispatch, manage financial risk, and deliver the affordable and reliable energy consumers deserve and expect,” Nelson said.
“We are confident that the pathway we’ve set out – one that strengthens markets, supports investment, and puts consumers first – is the right one.”
Calling for public feedback by mid-September, the Review makes recommendations for spot market improvements, and derivatives market strengthening by establishing of an always-on market making obligation (MMO).
It also recommends ways the government could support investment after the Capacity Investment Scheme (CIS) ends in 2027 and how to address long standing barriers to new investment in electricity generation projects.
The draft NEM Review’s public consultation closes 17 September 2025, with final recommendations scheduled to be delivered to the federal, state and territory energy ministers by the end of 2025.
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