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AEMC makes final rule to help vulnerable consumers get energy bill help they deserve

25 September 2025

The Australian Energy Market Commission (AEMC) today made a final determination requiring energy retailers to help consumers access concessions and rebates on their energy bills.

The AEMC has also made recommendations for jurisdictions and Services Australia to take action on longer-term solutions, including automating concession applications.

AEMC Chair Anna Collyer said the final rule will help vulnerable consumers access support they are entitled to, but stressed that bigger systemic changes are needed to deliver truly equitable outcomes.

"The final rule will help Australian households better understand what concessions or rebates they might be able to get on their energy bills, and remind them to apply whenever they sign up or switch energy plans," Ms Collyer said.

"However, our extensive consultation revealed that consumers face multiple barriers to accessing this help, including communication challenges, stigma, verification issues and limited time. An automated system that removes the application burden from consumers entirely would be the most effective way to overcome these compounding barriers."

Final rule changes to prompt customers to apply for concessions

Under the AEMC's final rule, energy retailers will be required to ask consumers about their eligibility for concessions and provide jurisdiction-specific information about what help is available whenever they sign up for an energy plan or switch to a new contract.

Australians who hold concession cards such as the Pensioner Concession Card, Health Care Card, or Department of Veterans' Affairs Gold Card may be eligible for money off their energy bill, depending on where they live.

Currently, they must proactively tell their retailer they are eligible, a requirement many consumers are unaware of. While retailers already have an obligation to provide general information about concessions, the new rule requires them to provide more detailed, jurisdiction-specific information and actively ask about eligibility.

The final rule changes will commence on 1 July 2026, aligning with the Commission's other reforms to improve consumer confidence in the retail energy market.

Consumers urged to act now

While these rule changes are being implemented, consumers don't need to wait for help.

Services Australia issues concession cards, but consumers must separately tell their energy retailer to receive bill discounts - creating a gap many people don't know about.

Ms Collyer urged eligible consumers to contact their retailer immediately to ensure they're receiving available concessions.

"If you have a concession card, contact your retailer now - or ConcessionsSA if you live in South Australia. Many consumers are missing out on help they're entitled to simply because they don't know to ask for it," Ms Collyer said.

Information about available concessions and rebates by jurisdiction is available at https://www.energy.gov.au/rebates or state and territory government websites.

Key recommendation: automate concessions and coordinate action across governments

Following detailed analysis and stakeholder consultation, the Commission identified that current barriers are too diverse and complex for rule changes alone to solve.

The Commission's key recommendation is for a cross-agency forum of relevant jurisdictional departments and Services Australia, initially facilitated by the Department of Climate Change, Energy, the Environment and Water, to determine next steps on automating the application of concessions.

"An automated system would mean eligible consumers automatically receive help with their bills without having to navigate different application processes across jurisdictions," Ms Collyer said.

The Commission also recommends that jurisdictions, Services Australia and retailers work together to streamline application processes and better inform consumers about available help.

Background

Energy concessions and rebates are programs funded by states and territories, with each jurisdiction setting different eligibility rules and amounts.

In making this rule change, the AEMC applied its equity guidance to address structural barriers that prevent consumers from accessing benefits.

This reform is one of a package of consumer-related rule change requests submitted by Energy Ministers.

The Commission has already delivered final determinations on Improving consumer confidence in retail energy plans, Assisting hardship customers, and Improving the ability to switch to a better offer.

More information is available on our Improving the application of concessions to bills project page.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au 

Final rule to help customers find better energy plans

11 September 2025

The Australian Energy Market Commission (AEMC) has made a final rule that makes it simpler for households and small businesses to save money on their energy bills.

It requires retailers to alert each customer of opportunities to save through switching to another plan in communications that accompany a bill.

The “better offer” message currently sits inside a customer’s energy bill. However, research shows nearly half of customers don’t always open their bill, meaning they are missing important details about how they can save.

AEMC Chair Anna Collyer said evidence shows that improved visibility of what’s on offer increases engagement.

“Energy bills can be complex, and many customers are busy, leading large numbers to disengage and potentially miss out on better plans,” Ms Collyer said.

“This final rule is like placing important price information on the shopfront, making it clear, upfront and hard to miss.

“More informed customers make better financial plans, which in turn improves competition in the energy retail market.”

The initial rule change request proposed improvements to the process to switch energy plans.

The AEMC made a more preferable final rule after drawing on insights from the Behavioural Economics Team of the Australian Government (BETA) and the Australian Energy Regulator to promote behavioural change.

Their research, along with stakeholder feedback, suggest that a more visible “better offer” message will encourage more customers to switch. Once a customer has decided on switching, the process is usually quick and straightforward.

Findings from the ACCC also show that customers who don’t regularly engage in the retail energy market often pay the highest prices, particularly those on legacy plans with large conditional discounts or expired benefit periods.

This work forms part of a package of seven rule changes submitted by Energy Ministers that aims to strengthen consumer protections and provide them with more opportunities to save money.

The measures to help customers switch to a better offer complement the recently completed Improving consumer confidence in retail energy plans rule change, which prevents retailers from increasing retail contracts more than once a year.

The AEMC is also undertaking a forward-looking electricity pricing review that includes examining broader reforms to help consumers engage more effectively in the retail market.

The final rule will come into effect on 30 December 2026. In the meantime, the AEMC encourages consumers to take a few minutes to check their energy bills to look for the better offer message, which could save them hundreds of dollars a year.

Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

AEMC calls for coordinated government action to ensure vulnerable consumers get energy bill help

03 July 2025

The Australian Energy Market Commission (AEMC) today published a draft determination aimed at making it easier for consumers to receive concessions and rebates on their energy bill.

The AEMC has also made recommendations for jurisdictions and Services Australia to consider longer-term solutions, including automating concession applications.

AEMC Chair Anna Collyer said the proposed reform would help vulnerable consumers access money they are entitled to, but stressed that bigger systemic changes are needed to deliver truly equitable outcomes.

“The proposed changes would help Australian households understand what concessions or rebates they might be able to get on their energy bills, and remind them to apply when they sign up with a retailer,” Ms Collyer said.

“However, our extensive consultation revealed that consumers face multiple barriers to accessing this help, including communication challenges, stigma, verification issues and limited time. The only way to overcome these compounding barriers is by removing the application burden from consumers entirely."

Proposed rule changes to prompt customers to apply for concessions

Under the AEMC’s more preferable draft rule, energy retailers would be required to ask consumers about their eligibility for concessions and provide information about what help is available in their state or territory when they sign up for an energy plan.

Australians who hold a concession card such as the Pensioner Concession Card, Health Care Card, or Department of Veteran’s Affairs Gold Card might be able to get money off their energy bill, depending on where they live.

Currently, they must proactively tell their retailer they are eligible - a requirement many consumers are unaware of. If the proposed rule changes are finalised, they would commence on 1 July 2026, aligning with the Commission's other reforms to improve consumer confidence in the retail energy market.

Consumers urged to act now

While these rule changes are being consulted on, consumers don't need to wait for help.
Services Australia issues concession cards, but consumers must separately tell their energy retailer to receive bill discounts - creating a gap many people don't know about.

Ms Collyer urged eligible consumers to contact their retailer immediately to ensure they're receiving available concessions.

"If you have a concession card or are an asylum seeker, contact your retailer now - or ConcessionsSA if you live in South Australia. Many consumers are missing out on help they're entitled to simply because they don't know to ask for it," Ms Collyer said.

Information about available concessions and rebates by jurisdiction is available at https://www.energy.gov.au/rebates or state and territory government websites.

Key recommendation: automate concessions and coordinate action across governments

Following detailed analysis and stakeholder consultation, the Commission identified that current barriers are too diverse and complex for rule changes alone to solve.
The Commission's key recommendation is for the Department of Climate Change, Energy, the Environment and Water to facilitate the next steps on automating the application of concessions.
"An automated system would mean eligible consumers automatically receive help with their bills without having to navigate different application processes across jurisdictions," Ms Collyer said.

The Commission also recommends that jurisdictions, Services Australia and retailers work together to streamline application processes and better inform consumers about available help.

The AEMC found that energy retailers are already incentivised to help consumers access concessions, as this reduces debt and financial hardship risks. However, the complexity of different jurisdictional requirements creates implementation gaps.

Background

Energy concessions and rebates are programs funded by states and territories, with each jurisdiction setting different eligibility rules and amounts.

In 2023, the Australian Energy Regulator found that not all eligible consumers were receiving concessions and called for system improvements to enable automation.

The AEMC has applied its updated decision-making guidance, which incorporates equity considerations, to this rule change request, focusing on addressing structural barriers that prevent consumers from accessing benefits.

This rule change request is one of seven submitted by Energy Ministers. The Commission has already delivered final determinations on Improving consumer confidence in retail energy plans and Assisting hardship customers, with the final determination on Improving the ability to switch to a better offer due for completion later this year.

The Commission is seeking feedback on the draft determination by 14 August 2025. More information is available at the AEMC project page on Improving the application of concessions to bills.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

AEMC delivers enhanced consumer protections to help customers find better energy deals

19 June 2025

The Australian Energy Market Commission (AEMC) today announced major new reforms that will deliver stronger protections for energy consumers and help more households access better energy deals.

The new rules, responding to requests submitted by Energy Ministers in August 2024, will restrict energy retailers from raising prices more than once per year, remove unfair fees for vulnerable customers, and ensure hardship customers benefit from their retailer's cheapest available deals if they cannot switch.

AEMC Chair Anna Collyer described the changes as a significant milestone in consumer protection. They also mark the first time the Commission has formally applied equity considerations to protect Australia's most vulnerable energy users.

"These reforms will help ensure that Australian households can have greater confidence in their energy plans and that those experiencing financial difficulty receive appropriate support," Ms Collyer said.

"For the first time, we have formally applied our updated equity guidance across these rule changes, explicitly considering how contract terms, benefits, and fees may disproportionately impact vulnerable consumers."

Final determinations on protections

Improving consumer confidence in retail energy plans

The final determination addresses systemic issues affecting consumers' trust in the energy market. The final rule will:

protect customers from paying higher prices for their loyalty by ensuring they pay no more than the standing offer price if their energy plan's benefits change or expire
remove unreasonably high penalties for not paying bills on time
restrict retailers from increasing prices in market retail contracts more than once every 12 months
prohibit retail fees for vulnerable consumers and limit fees and charges to reasonable costs for all other consumers.

"By limiting retail energy price increases to once per year, which for most customers will fall in July to align with regular industry updates, we're ensuring Australian households can better predict their energy costs and avoid unexpected price rises throughout the year," explained Ms Collyer.

The new rules on improving consumer confidence in retail energy plans will take effect on 1 July 2026, giving retailers just over 12 months to implement them.

Assisting hardship customers

The final determination recognises that hardship customers face unique barriers when engaging with the energy market, including a lack of time, stress from ongoing financial pressure, or literacy and language barriers.

The final rule places a stronger onus on retailers to assist hardship customers with better offers while giving retailers flexibility in delivering these protections. It ensures hardship customers are financially no worse off than if they were on their retailer's lowest cost deemed better offer.

The AEMC has designed these protections to work within existing legal frameworks while preserving customer choice. The Commission notes that broader reviews of customer experience frameworks are being examined by Energy Ministers.

"Our final rule acknowledges these challenges and shifts more responsibility to retailers to ensure these customers receive appropriate support," said Ms Collyer.

The new rules on assisting hardship customers will come into effect from 30 December 2026. The longer timeframe allows the AER to update its guidelines before retailers implement the new protections.

Draft determination targets switching barriers

Improving the ability to switch to a better offer

Following extensive consultation, the AEMC’s draft determination proposes a targeted solution to increase awareness of potential energy savings by improving visibility of the 'better offer message' that already appears on energy bills.

Research shows as many as 40 per cent of customers do not always open their bills, missing important messages about potential savings. The draft rule would require retailers to present better offer messages in cover emails and bill summaries.

Ms Collyer said research cited by the Australian Energy Regulator showed that seeing the better offer message is effective in engaging customers.

"When we initiated this rule change process in February, we initially explored whether streamlined switching processes would benefit consumers.

"However, stakeholders indicated that the switching process is easy and generally only takes a few minutes. This is in comparison to finding and evaluating which plan is best for the customer, which can be challenging.

“The primary opportunity is visibility – ensuring customers know when better deals are available to them,” Ms Collyer said.

Ms Collyer encouraged customers not to wait.

"Don't wait for our rule to take effect. If you haven't checked your energy bill lately, take a few minutes to look for the better offer message. It could save you hundreds of dollars a year, and switching typically only takes a few minutes,” she said.

Submissions on the draft determination for improving the ability to switch to a better offer are due by 31 July 2025. The AEMC will publish its final determination in September 2025 following further consultation.

Equity at the heart of decision-making

The AEMC has applied its updated decision-making guidance, which incorporates equity considerations, to each of the rule change requests,

"Our equity guidance recognises that energy equity exists where all consumers can fairly access and benefit from the energy system.

"In practice, this means addressing structural barriers that prevent consumers from accessing benefits and ensuring our decisions don't create or exacerbate vulnerability.

“For example, we found that retail fees disproportionately affect vulnerable consumers who may struggle to engage with the market, and therefore we are prohibiting these fees for those customers,” Ms Collyer said.

Background

This rule change package responds to findings from the ACCC that customers who do not regularly engage in the retail energy market often pay higher prices, particularly those on legacy plans with large conditional discounts or expired benefit periods.

The AER's foundational work on better bills and payment difficulty has also informed the Commission's approach to these consumer-focused reforms.

This work forms part of a seven-rule change package submitted by Energy Ministers, with the remaining determinations on improving the application of concessions to bills and the final determination on improving the ability to switch to a better offer due for completion later this year.

For more information, visit the AEMC project pages on Assisting hardship customers , Improving consumer confidence in retail energy plans , and Improving the ability to switch to a better offer.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

AEMC proposal to improve confidence in retail energy plans and stronger protections for energy consumers experiencing hardship

27 March 2025

The Australian Energy Market Commission (AEMC) today published two draft determinations aimed at enhancing safeguards for energy consumers.

AEMC Chair Anna Collyer said the changes would create a fairer retail energy market for all households, with special consideration for those experiencing vulnerability or hardship.

"The proposed changes will help ensure that Australian households can have greater confidence in their energy plans and that those experiencing financial difficulty receive appropriate support,’’ Ms Collyer said.

The determinations align with our consumer strategic priorities to inform, empower, and protect consumers individually and as a collective.

Better support for hardship customers

The first draft determination responds to a rule change request from Energy Ministers to increase support for people experiencing hardship. The draft rule would ensure that hardship customers are no worse off if they do not take up a better offer from their retailer due to existing barriers they face, while also preventing them from incurring unnecessary debt.

The draft rule places a stronger onus on retailers to assist hardship customers with better offers while giving retailers flexibility in delivering these protections. It also improves the reporting and transparency of hardship offers to assist the Australian Energy Regulator with monitoring and compliance.

"Customers experiencing hardship face unique barriers when engaging with the energy market, including lack of time, stress from ongoing financial pressure, or literacy and language barriers," said Ms Collyer.

‘’Our draft rule acknowledges these challenges and shifts more responsibility to retailers to ensure these customers receive appropriate support."

Improving consumer confidence in retail energy plans

The second draft determination consolidates four rule change requests into one rule change process focused on improving confidence in retail energy plans. The draft rule addresses systemic issues affecting consumers' trust in the energy market.

The draft rule would:

protect customers from paying higher prices for their loyalty by ensuring they pay no more than the standing offer price when their energy plan's benefits expire
remove unreasonably high penalties for not paying bills on time restrict retailers from increasing prices in market retail contracts more than once every 12 months
prohibit fees and charges for vulnerable consumers and limit fees and charges to reasonable costs for all other consumers.

"These changes will provide greater certainty and transparency around what consumers will pay for their energy and when those prices can change," said Ms Collyer.

"By limiting retail energy price increases to once per year, which for most customers would fall in July to align with regular industry updates – we're ensuring Australian households can better predict their energy costs and avoid unexpected price rises throughout the year.’’

These rule changes, submitted by Energy Ministers, have been carefully assessed by the Commission against our statutory objectives, leading us to make more preferable solutions in several areas. Our draft rules reflect an independent, evidence-based approach that balances consumer protections with market efficiency to deliver outcomes that best serve Australian energy consumers in the long term.

The consolidated rule changes respond to findings from the ACCC that customers who do not regularly engage in the retail energy market often pay higher prices, particularly those on legacy plans with large conditional discounts or expired benefit periods.

Applying an equity lens to energy rules

The AEMC has applied its updated decision-making guidance across all four rule change requests, explicitly considering equity and how contract terms, benefits, and fees may disproportionately impact vulnerable consumers.

‘’Our equity guidance proposes that energy equity exists where all consumers can fairly access and benefit from the energy system," Ms Collyer said.

"In practice, this means addressing structural barriers that prevent consumers from accessing benefits and ensuring our decisions don't create or exacerbate vulnerability.

"For example, we found that unreasonable conditional discounts disproportionately affect vulnerable consumers who may struggle to meet payment conditions due to financial constraints. By requiring retailers to apply discounts regardless of whether conditions are met, we're ensuring these customers aren't unfairly penalised."

Our updated guidance reflects our evolved considerations in relation to equity and will make how we consider equity in the AEMC's decision-making process more transparent.

The AEMC is seeking stakeholder feedback on both draft determinations by 8 May 2025.

The new rules, if made, would take effect from 1 July 2026, giving retailers just over 12 months to implement the changes.

For more information, visit our project pages on Assisting hardship customers and Improving consumer confidence in retail energy plans, or learn about our decision-making guidance that incorporates equity.

Media: Jessica Rich 0459 918 964 or media@aemc.gov.au

Energy market gets clear vision: Reform opens door for all to benefit from virtual power plants

19 December 2024

The Australian Energy Market Commission (AEMC) has released a final determination that allows virtual power plants to compete directly with large-scale generators in the energy market, to the benefit of all consumers through significant cost savings, lower emissions, and reduced energy prices.

The reforms create efficiencies by allowing virtual power plants and commercial and industrial demand response and aggregated batteries to compete directly with traditional power stations.

Currently there is no mechanism for the market to predict how these resources will respond to daily price fluctuations.

This gap in market knowledge creates significant operational challenges for the Australian Energy Market Operator (AEMO) and can lead to costly system operations. These problems are growing as the rollout of batteries and electric vehicles gathers pace.

AEMC Chair Anna Collyer said this work represents a pivotal moment in our energy market's evolution.
''This reform is like giving the electricity system a pair of glasses – suddenly, it can see and respond to retailers' and customers' actions that were previously invisible.

''We are enhancing market efficiency by creating new opportunities for both energy suppliers and users to participate in ways that weren't possible before,'' she said.

The reforms create a new ''dispatch mode'' that allows retailers to bid these resources into the wholesale electricity market.

This includes virtual power plants combining household batteries, community batteries, backup generators, and large energy users managing their consumption.

"Whether it's data centres shifting computing load, manufacturers using backup generators, commercial chillers, or household batteries aggregated as virtual power plants, retailers can now bid these resources into our wholesale market," Ms Collyer explained.

The Commission's modelling shows that if these resources participate, it could deliver $834 million in cost savings between 2027 and 2050 through more efficient market operation.

To overcome initial barriers and secure these long-term benefits for consumers, the reforms include a $50 million incentive scheme for early participants.

"This improved visibility will lead to more efficient generation use, lower system costs, and reduced energy prices for all consumers.

''While there are costs to encourage early participation, the long-term benefits for consumers far outweigh these initial investments. It's a win-win that doesn't require changing behaviour, just smarter market operation." Ms Collyer said.

The reform represents the primary focus of the AEMC's work program for integrating consumer energy resources into the wholesale electricity market.

The new framework will take effect from May 2027, with incentives available from April 2026.

Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

AEMC unveils new rules to boost consumer energy resource benefits

15 August 2024

New rules by the Australian Energy Market Commission (AEMC) are set to make it easier for households and businesses to capture value from their consumer energy resources (CER) and exercise greater control over their energy use.

‘CER’ refers to smaller-scale energy resources owned by customers, which can produce, store, or vary how they use energy. There are newer forms of CER such as solar panels, batteries, and electric vehicles, and more traditional assets such as hot water heaters and pool pumps.

Australia’s energy landscape is being transformed by the uptake of these resources and consumers becoming more engaged in the different ways they can use them.

By 2030, it’s predicted at least one in eight households will have a battery or electric vehicle, or both. By 2050, that number is expected to rise to one in four. Around one in six free-standing Australian homes have solar panels, with one in two expected by 2040.

These trends represent an enormous opportunity for Australia’s energy future. CER, along with resources such as neighbourhood batteries, have an important role to play in the power system. They can help reduce overall system costs, improve reliability, and achieve a secure, low-emissions energy supply for all consumers.

The final rules, in response to a request from the Australian Energy Market Operator (AEMO), will introduce the following arrangements.

Large customers will be able to engage multiple energy service providers at their premises more easily, to manage and obtain more value from their CER.
Energy service providers for small and large customers will be able to separate and manage 'flexible' CER (such as EV chargers, batteries) from 'passive' loads (like fridges and lights) in the energy market, leading to more product and service options for consumers.
Market participants will be able to use in-built measurement capability in technology such as EV chargers and smart streetlights, eliminating the need for separate meters.

Chair Anna Collyer says these rules are an important enabler in the context of the National CER Roadmap.

‘’They make a series of incremental changes that, alongside other reforms, will unlock substantial benefits from flexible CER for consumers and the system as a whole. "If these resources are integrated well, the power system will operate more smoothly, and consumers and industry will enjoy the benefits of cheaper supply.

"A range of studies has estimated the net benefit of effective integration and coordination of CER to be up to $6.3 billion by 2040," Ms Collyer said.

This rule change will empower consumers to access new energy products and services, enabling them to maximise value from their flexible CER and better manage their energy use.

It also aims to promote innovation and competition in the electricity retail sector by simplifying the process of separating and unlocking value from CER.

For example, these rules will make it easier for retailers to offer households EV charger products with built-in metering and dedicated tariffs. This means consumers could potentially receive separate billing for their EV charging, distinct from their regular household energy use. If they choose, they could also trade excess energy from their EV back to the grid.

The in-built metering arrangements will also make it easier to deploy public infrastructure such as EV chargers and smart streetlights. Modelling shows this could generate benefits of up to $100 million over two decades, including $16 million attributed to emission reductions.

"We are committed to reforms that pave the way for the innovation required to meet the challenge of integrating CER, knowing that if we do nothing, all consumers will face higher costs," Ms Collyer said.

The AEMC's final determination is part of a broader suite of reforms aimed at supporting the energy transition and unlocking the full potential of CER for the benefit of all consumers.

These reforms are interconnected and wide ranging. They include reviewing pricing structures, speeding up the rollout of smart meters, and improving consumer access to real-time energy data.

''Additionally, we have published draft rules to create greater visibility of price-responsive resources, such as household batteries, to make it easier for them to participate in the market. We think this could help AEMO and networks to operate the system more efficiently, ultimately leading to lower prices and emissions.

"These reforms are crucial pieces of the CER puzzle. They create opportunities for innovation, helping consumers reduce bills and participate more actively in our energy system, while improving grid management and reducing emissions,’’ Ms Collyer concluded.

Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

AEMC launches major review to shape consumer-centric pricing

25 July 2024

The Australian Energy Market Commission (AEMC) today announced a comprehensive review that puts consumers at the heart of future electricity pricing, products, and services.

The Electricity pricing for a consumer-driven future Review will examine how the rapidly evolving energy landscape can best serve all Australians in an era of increasing consumer energy resources (CER).

AEMC Chair Anna Collyer emphasised the importance of this forward-looking initiative.

''As we see more households adopting technologies like solar panels and batteries, it's crucial that our electricity pricing, products, and services evolve to meet changing consumer needs.

''This Review will take a fresh look at how we can deliver the best outcomes for all consumers across the electricity supply chain,'' she said.

The Review comes at a critical time, with studies estimating that effective integration of CER could deliver net benefits of up to $6.3 billion by 2040. Realising these benefits hinges on offering consumers the right mix of products and services.

“Effectively integrating CER resources into the wider energy system will help to reduce overall system costs, improve reliability, and achieve a secure, low-emission energy supply for all consumers.

“The key to achieving these benefits is offering consumers the right products and services, as well as clear information, choice, and appropriate protections,” Ms Collyer explained.

The AEMC's Review will consider market arrangements that provide consumers with a range of appropriate products and services, and prices to suit their needs and preferences. It will also examine the roles of distribution networks and retailers in enabling these offerings and ensuring efficient outcomes.

"We're not just looking at those who have adopted new energy technologies. This Review will consider how to deliver benefits and protections for all consumers, whether or not they have CER at home,'' Ms Collyer said.

The AEMC has released draft terms of reference for the Review and is inviting stakeholder feedback by Thursday, 22 August.

These submissions will inform the final terms of reference, to be published as part of a consultation paper by November 2024.

''We're committed to conducting this Review in an open and collaborative manner. Input from consumers, industry, and other stakeholders will be crucial in shaping a future electricity market that works for everyone."

The AEMC expects to release the final report in early 2026, providing a roadmap for a more consumer-centric, efficient, and sustainable electricity market. Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

Virtual Power Plants to compete with big generators to drive down prices

25 July 2024

The Australian Energy Market Commission (AEMC) has released a draft paper that proposes allowing Virtual Power Plants (VPPs) to compete directly with large-scale generators in the energy market, to the benefit of all consumers through significant cost savings, lower emissions, and reduced energy prices.

The draft determination also extends beyond VPP's to include community batteries, flexible large loads, and other price-responsive small resources such as such as back-up generators, marking a significant shift in Australia's energy landscape.

AEMC Chair Anna Collyer said this work represents a pivotal moment in our energy market's evolution.

''By integrating VPP's and similar resources, we're not just enhancing market efficiency; we're empowering consumers and paving the way for a more sustainable energy future,'' she said.

Currently, there is no mechanism for the market to predict how these resources will respond to daily price fluctuations.

This gap in market knowledge creates significant operational challenges for the Australian Energy Market Operator (AEMO) and could lead to costly system operations.

''Fully integrating these resources will allow energy, security, and reliability services to be provided more efficiently,'' explained Ms Collyer.

''Over time, this integration will reduce the need for large scale generation and storage infrastructure, ultimately decreasing costs and emissions for all consumers.''

Recent modelling indicates that VPP market participation could result in cost savings of $834 million between 2027 and 2050, benefiting all customers through more efficient market operation. This underscores the critical importance of encouraging VPP participation.

The AEMC is therefore calling on governments to recognise these resources officially. Once they participate in dispatch, they will be as technically capable as any other generator and should be eligible for schemes such as the Capacity Investment Scheme.

To encourage broad participation, the draft determination includes a mechanism to provide payments to early entrants. However, recognising that a mechanism in the rules may not be the ideal fit, the AEMC is also calling on the Australian Renewable Energy Agency (ARENA) to consider a trial grant program for early entrants.

Ms Collyer says the reform isn't just about integrating new technology but also about reimagining our approach to energy generation and distribution.

''By incentivising early participants, we're accelerating the transition to a more responsive, efficient, and sustainable energy market," she said.

The draft determination also addresses the current gap in the market knowledge regarding the impact these resources are having on operational forecasting. Under the proposal, AEMO and the Australian Energy Regulator would have new monitoring and reporting functions to provide additional transparency.

This rule change is a key component of a broader reform package aimed at integrating consumer energy resources. It represents the primary focus in the AEMC’s work program for integrating these resources into the wholesale electricity market.

''By making price-responsive behaviour visible, we're allowing the market to operate more efficiently. It's like giving the system a pair of glasses – suddenly, it can see and respond to consumer actions that were previously invisible.

''This improved visibility will lead to more efficient generation use, lower system costs, and potentially reduced energy prices for all consumers. It's a win-win that doesn't require changing behaviour, just smarter market operation,'' Ms Collyer said.

The AEMC invites stakeholders to provide feedback on this draft determination. The consultation period will run until 12 September, with a final determination expected by the end of the year.

Visit the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

Enhancing the Retailer of Last Resort scheme

20 June 2024

The Australian Energy Market Commission (AEMC) has released its final report with 10 recommendations to improve the Retailer of Last Resort (RoLR) scheme, drawing on valuable insights gained by regulatory agencies, market participants, and governments during the energy crisis of 2022, which saw an unprecedented number of retailer failures.

AEMC Chair Anna Collyer said the recommendations would simplify and improve both the RoLR scheme and the gas directions framework, providing market participants with greater certainty and clarity before, during, and after retailer failure events.

‘’The recommendations focus on supporting more timely access to critical information in the event of retailer failures, reducing the cost of such failures for consumers and designated RoLRs, and improving incentives within the RoLR scheme.

‘’These recommendations were informed and shaped through extensive stakeholder consultation over the past two years.

''We believe they will enhance the RoLR scheme as an effective safety net, helping address the risks faced by retailers and consumers when a retailer fails, ultimately supporting better market outcomes and ongoing financial resilience in the retail market," Ms Collyer said.

In the National Electricity Market’s (NEM) competitive retail market, high levels of entry and a dynamic spot market create the risk of retailer failures. As such, retailer failures are likely to occur over time, necessitating efficient and effective exit arrangements that ensure continuity of supply for impacted consumers while minimising costs and systemic risks.

Most of the AEMC’s recommendations involve changes to the National Energy Retail Law (NERL), meaning they must be implemented by jurisdictions.

‘’The AEMC welcomes the opportunity to work constructively with jurisdictions, to progress these recommendations for implementation,’’ said Ms Collyer.

Background:

The RoLR scheme protects consumers by ensuring continuity of supply to a customer if their retailer fails. This framework is supported by a gas directions framework which allows the AER to direct gas supply in the event of a retailer failure.

Between 2012 and 2022, the RoLR scheme had only been used four times, and the AER had never used its gas directions powers. Following the unprecedented number of retailer failures in mid-2022, Energy Ministers sought the AEMC’s expert advice on managing retailer failures and improving market resilience.

A key recommendation supported by Energy Ministers was for the AEMC to initiate this Review to consider improvements to the RoLR scheme. Our final report and 10 recommendations deliver upon this work.

View the project page for more information and contact details.

Media: Jessica Rich, 0459 918 964, media@aemc.gov.au

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