Australian Energy Regulator calls for greater network efficiency amid market volatility and consumer energy transition
The AER annual report profiles a year of ongoing volatility and transformation in Australia’s energy landscape, examining both electricity and gas markets from generation through to end-user trends.
For over 15 years, the annual Australian Energy Regulator’s (AER) State of the Energy Market report has provided a critical overview of Australia’s energy market trends. The State of the Energy Market 2024 report, released this week, reviews trends across Australia’s gas and electricity sectors, highlighting evolving consumer involvement and market challenges.
The annual report found that during 2024 wholesale electricity prices showed some relief compared to the extreme highs of 2022, but remained volatile due to weather patterns, maintenance outages, and peak demand stresses. Queensland saw record high electricity demand, while New South Wales, Victoria, South Australia, and Tasmania hit record lows.
Across the National Electricity Market (NEM), residential investment in rooftop solar, home batteries, and electric vehicles continued to expand, with rooftop solar capacity reaching over 20 gigawatts – a gain of 2.9 gigawatts from the previous year.
“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,” said AER Chair Clare Savage. This, she noted, would help optimise the grid as the market shifts towards decentralised and renewable sources of energy.
To support this transition, the AER is encouraging industry players to trial innovative energy solutions. Regulatory sandboxing tools, such as the Energy Innovation Toolkit, are available to facilitate the testing of new technologies and services, offering consumers more options and the potential for reduced costs.
“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,” Ms Savage said.
The gas market has also seen shifts, with some progress towards electrifying domestic gas use. Gas is still essential for large industry and electricity reliability, though electrification and cleaner alternatives are gaining traction.
The AER report also draws attention to the pressures on affordability. The average debt per customer increased in 2023–24, although government rebates have helped cushion households from some price rises. Broader economic challenges are affecting consumers, with debt levels remaining steady but at a higher per-customer average.
Alongside this latest review, the AER will publish additional in-depth analyses into specific areas of the energy system in the coming months, offering industry and government stakeholders further insights into this rapidly changing sector.
