MEDIA RELEASE: Governance reform essential to unlock potential of a 21st century energy system 03 July 2025
A new green paper released today finds a fundamental revamp of how Australia governs electricity is needed to ensure the energy transition delivers for families and businesses.
The green paper, NEM Governance Reform: Options for the Future Electricity System, finds there is an urgent need to overhaul the institutional arrangements associated with the National Electricity Market (NEM), and sets out broad directions to improve coordination, accountability, and whole-of-system thinking.
Commissioned by the Energy Efficiency Council (EEC) with the support of the RACE for 2030 Cooperative Research Centre (RACE), the green paper draws on expert interviews, research and cross-sector consultation to spark discussion and debate, and inform an upcoming white paper.
“Despite a huge amount of effort from people working in government, market bodies and industry, the way we govern energy in Australia hasn’t kept pace with the scale and complexity of today’s energy challenges and opportunities,” said Luke Menzel, CEO of EEC.
“We need to back in the efforts of all those professionals by ensuring the institutions in charge of our electricity markets have the remit, resources and support they need to rapidly roll out a twenty-first century energy system that works for consumers.”
The green paper identifies seven critical governance challenges, including fragmented responsibilities, gaps in data collection, analysis and strategic advice, and a lack of demand-side coordination.
“Appropriate expertise and technology needs to come together to rapidly inform the change architecture needed to govern and accelerate the energy transition, whilst maintaining the critical energy services needed for daily life, and to set up the new governance arrangements that will form the backbone of our future energy system,” said Bill Lilley, CEO of RACE for 2030.
“To realise the greatest value of the energy transition for all Australian citizens, the current governance architecture needs to transition from a 19th century centralised approach to a 21st century decentralised one. It needs to shift to an approach that embraces innovative market arrangements, is simple and transparent, and rewards distributed suppliers and demand-side action of all sizes.”
The green paper proposes broad directions for reform, such as clear allocation of responsibility for strategic analysis and advice, increased resourcing for multilateral bodies, improving data and modelling capabilities, strengthening consumer engagement, and ensuring demand-side experts are embedded in governance.
The release of the green paper provides an opportunity for stakeholders across industry, government and the broader energy sector to contribute their feedback, which will help shape a white paper with clear reform recommendations, to be released by the end of the year.
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Download the report: NEM Governance Reform
Media enquiries:
EEC | James Pound | 0420 253 650 | info@eec.org.au
RACE | Ori Papadopoulou| 0422 612 136 | ori.papadopoulou@racefor2030.com.au
About the EEC
The EEC is a not-for-profit membership association for businesses, universities, governments and NGOs. The EEC works to build sophisticated markets for energy management products and services that deliver a prosperous, net zero Australia with:
- Affordable, reliable energy;
- Healthy, comfortable buildings; and
- Productive, competitive businesses.
About RACE for 2030
RACE is the cooperative research centre for the energy and carbon transformation.