The market price settings are critical determinants of the cost of energy. Over recent years the Market Price Cap (MPC) has continued to rise, driven by an assumption this is necessary to encourage new renewable generation investment.
But with the rise in consumer energy resources (CER) and other reforms the MPC and other settings are less influential and should be lowered, helping reduce energy costs for consumers.
That’s why we made a series of recommendations in our response to the AEMC Reliability Panel’s 2026 Reliability Standard and Settings Review – Issues Paper to relax the reliability standard and lower the market price settings, with a focus on enabling efficiency, including:
- Recognising that batteries, demand response projects and virtual power plants are the most likely new entrants to the market, and;
- accounting for the full range of mechanisms influencing investment and reliability and adjusting the market settings accordingly.
What’s next?
We will continue advocating throughout this process, to ensure both reliability and fair costs for households throughout the energy transition. We will also work with other stakeholders to push for change through the recommendations of the NEM wholesale market review and other reform processes.
