Australian electricity and gas markets – September 2025 Update
10 September 2025
Highlights for August 2025
In this update, we take a look at the latest rule changes and market updates published in August 2025, which affect participants in the Australian electricity and gas markets.
What you need to do
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Stakeholders should note the market updates below, and note any impacts on their compliance obligations.
National Gas Rules
Draft Rule – extension of the DWGM Dandenong LNG interim arrangements
On 7 August 2025, the Australian Electricity Market Commission (AEMC) published its draft determination and draft rule to extend the Declared Wholesale Gas Market (DWGM) Dandenong liquified natural gas interim arrangements. The draft rule enables the Australian Electricity Market Operator (AEMO) to address security and reliability risks in the short-term until a fit-for-purpose solution is implemented.
Key features of the more preferable draft rule include:
- A four year extension of AEMO’s interim buyer and supplier of last resort powers for the Dandenong LNG storage facility;
- Introduction of a rules-based arbitration mechanism to resolve any disputes regarding the extension of the LNG storage agreement between AEMO and the facility operator, APA;
- Additional measures to limit the costs that AEMO may otherwise incur under the interim arrangements;
- Application of a targeted set of Gas Bulletin Board reporting obligations to the Dandenong liquefaction facility; and
- Enhanced operational visibility for AEMO in relation to the Dandenong liquefaction facility.
Stakeholder submissions are due by 18 September 2025.
Directions Paper – EGCS reliability standard and associated settings
On 28 August 2025, AEMC published a directions paper in response to a rule change request from the Chair of the Energy Senior Officials and the Victorian Minister for Energy and Resources (the proponents) to amend the National Gas Rules (NGR). The rule change requested the implementation of a reliability standard and related reliability tools for the East Coast Gas System (ECGS).
The directions paper shares the Commission’s current thinking on the issues raised in the rule change request so it can test high-level solutions with industry, governments, market bodies and consumers ahead of a draft rule determination.
AEMC are seeking feedback on the policy positions described in the directions paper. Submissions close on 25 September 2025.
Other Updates
NEM Wholesale Market Settings Review
On 6 August 2025, the draft report for the NEM Wholesale Market Settings Review was released. Further information about the draft report is available in our update here.
Without limiting the feedback from stakeholders, the Panel is welcoming input on the questions posed in each of the themes in the Draft Report by 17 September 2025.
The panel has also established working groups to assist with the design of the contracts to underpin the proposed Market Making Obligation and the proposed Electricity Services Entry Mechanism. The outcomes of the workshops will be incorporated into the final report.
AEMO – consultation papers and Electricity Statement of Opportunities
On 21 August 2025, AEMO published the 2025 National Electricity Market Electricity Statement of Opportunities (ESOO) report. This document provides a ten-year outlook on the investment required to maintain reliability within the National Electricity Market (NEM). The report indicates an improved reliability outlook, contingent upon the timely and complete delivery of all anticipated investments. It presents two principal reliability scenarios: Government Schemes and Actionable Developments, and Committed and Anticipated Developments.
Key findings from the report include:
- Forecast reliability has improved compared to last year’s report, largely due to over 10 gigawatts (GW) of additional projects now meeting AEMO’s committed and anticipated criteria. This includes 2.9 GW (7 gigawatt hours) of utility storage, 4 GW of grid-scale solar, and 3 GW of wind generation.
- AEMO has been notified by owners that 11 GW of predominantly coal-fired power stations are expected to retire.
- Electricity consumption is projected to rise by 21%, increasing from 178 terawatt hours (TWh) to 229 TWh. This growth is mainly attributed to the rapid expansion of data centres, the inclusion of prospective industrial loads, and the acceleration of business electrification.
- Potential reliability risks can be managed, provided that new generation, storage, and transmission developments are delivered on schedule. These developments are often supported by government-led investment programmes and coordinated consumer energy resources (CER).
AEMO also released:
- Demand Side Factor Information Guidelines consultation paper Submissions are due 11 September 2025.
- Draft Report ST PASA Replacement Project to initiate the second stage of consultation. Submissions on the consultation paper and procedures are due 12 September 2025.
AER – Embedded Network Review Final Decision
On 29 August 2025, the Australian Energy Regulator (AER) published the revised Network Exemption Guideline and Retail Exempt Selling Guideline (versions 7), alongside its final decision on the Review of the AER exemption frameworks for embedded networks (AER Review of the exemptions framework for embedded networks - Notice of final decision - 29 August 2025.pdf).
Embedded networks are private electricity networks supplying multiple customers from a single metering point, commonly found in caravan parks, apartment buildings, shopping centres, and business parks. These networks are managed by service providers exempt from registering with the Australian Energy Market Operator (AEMO). Customers in embedded networks purchase electricity from either exempt sellers – who do not require retailer authorisation – or authorised retailers. The AER administers the exemptions framework through its guidelines, which relieve eligible entities from certain national energy law obligations.
With the rapid growth of embedded networks, concerns have arisen about regulatory gaps and limited customer choice. In response, the AER began a review in 2023 to assess the benefits and risks for embedded network customers and to consider possible changes to the framework. The review included broad consultation and research into customer outcomes.
The AER’s final decision maintains the current approach, finding that restricting embedded networks is not justified at this time and should be a matter for jurisdictional policy makers. However, the review identified areas to strengthen consumer protections and improve oversight. The revised guidelines introduce new requirements, including:
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Obligations for all exempt entities to keep key registration details current
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Enhanced oversight of smaller embedded networks
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Strengthened consumer protections, such as new family violence protections for residential and small business customers
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Requirements for certain exempt sellers to publish customer tariffs
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New obligations for some exempt sellers to include ombudsman scheme contact details on customer bills
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Potentially resolved questions about whether a network is created within an integrated resource system including where different entities own different components of the system.
The AER’s final position is that all energy customers should, as far as possible, enjoy comparable consumer protections, but achieving this will require action from jurisdictional governments to address gaps beyond the AER’s regulatory remit.
Authors: Dan Brown, Partner; Dale Gill, Partner; Aylin Cunsolo, Partner; Paul Newman, Consultant; Savannah Tindiglia, Graduate and Isabella Skene, Paralegal.
