Decarbonising Australian Electricity Markets: Regulatory Roadblocks and Transformative Opportunities for Achieving Net Zero

Abstract

With a national emissions profile revealing a persistent role for fossil fuels in the energy and electricity fuel mixes, Australia's ability to realise its net zero emission ambitions is inherently linked to how the country manages and supports the decarbonisation of its energy sector to ensure the realisation of net zero goals by 2030, 2050, and beyond. Rapid growth in distributed energy resources is now challenging Australia’s electricity system and the regulatory framework, both of which were established on assumptions of centralized electricity supply from large generators to passive consumers. This article recognises that while regulatory frameworks – policies, laws, other instruments – can be critical enablers of desirable transitions, the current regulatory regime governing Australia’s energy markets has been a significant impediment to the energy sector decarbonisation and emission mitigation. Aspects of the regulatory framework that can encourage or hinder the development of future high DER markets and the decarbonisation transition across the national energy market are also explored.