Challenges in the Consumer-Side of the Energy Transition

Abstract

The decarbonisation of the Australian economy relies on the transition of the electricity grid from fossil fuel to renewable sources. In this paper, we briefly summarise the logic behind the design of the National Electricity Market, the market servicing 88% of the Australian population. We then explore the challenges facing the National Electricity Market during its transition and emphasise key proposals aimed at reforming the consumer, or demand-side, of the market. We highlight four challenges - whether consumers will be active, whether retail markets can deliver contracts that facilitate efficient transition, whether the wholesale market will operate effectively and whether regulatory barriers can be quickly addressed.