What we report on
Each year we are required to report to the NSW Minister for Energy on the performance and competitiveness of the NSW retail electricity market.
The matters we are required to report on are specified in the National Energy Retail Law (NSW).
This year the NSW Minster for Energy also requested that we include analysis on virtual power plants, demand response programs and demand tariffs in the Market Monitoring report.
Overview of the key findings
While there are many retailers in NSW providing offers to customers, the retail electricity market remains concentrated with most small customers supplied by one of the major retailers (AGL, Origin Energy and EnergyAustralia).
Retail electricity prices rose sharply over 2022-23 and 2023-24, reflecting higher wholesale electricity costs in recent years and higher network costs. As a result of the price increases, over 50% of residential customers on flat-rate tariff plans in NSW were paying prices equal to or higher than the relevant Default Market Offer in August 2023.
Further, while there are better offers available to many customers, there are barriers that consumers face when trying to switch retailer or plan. These primarily relate to:
- insufficient information and tools to help consumers estimate the cost of different plans
- challenges in interpreting complex tariff structure information.
We have also conducted analysis on the annual cost of demand tariff plans for non-solar customers in the Ausgrid distribution network. We found:
- there is significant variation in the demand charge component of annual bills, depending on the demand tariff plan. The annual demand charge component can range from as little as $10 to over $800 for the same customer, depending on their demand tariff plan.
- non-solar customers on demand tariff plans are likely to have annual bills that are, on average, $200 to $300 higher compared to if they were on a flat-rate or time-of-use tariff plan.
We have also reported on demand response programs and virtual power plants in NSW. While there is limited information on demand response programs, we found there were at least 18 virtual power plants on offer in NSW in October 2024. These virtual power plants varied materially on eligibility, features, pricing, incentives (upfront and ongoing), and terms and conditions.
We have made 10 recommendations
IPART has made 10 recommendations to improve competition and consumer outcomes in the NSW retail electricity markets. These recommendations are targeted at:
- giving consumers better information on the price of plans to help them find cheaper offers
- removing barriers that consumers face when they go to switch
- making sure there are adequate protections in place for customers that do not engage
- highlighting areas of the energy supply chain for further investigation.