National Electricity Market wholesale market settings post-draft submission

29 September 2025

The Productivity Commission (PC) made a post-draft report submission to the review of the National Electricity Market (NEM).

Reliable, affordable electricity is essential to productivity. Moreover, achieving Australia’s climate goals, and doing so at the lowest possible cost, will require the electricity sector to decarbonise in an efficient way.

The NEM review represents an opportunity to make significant progress towards decarbonising electricity and achieving other energy policy objectives, and doing so through enduring and broad-based market settings.

In this submission, the PC broadly supports ideas for improving the functioning of the spot and derivative markets and minimising costs for consumers, and finds that the Electricity Services Entry Mechanism (ESEM) is a promising means of promoting investment.

Consistent with the PC’s inquiry on Investing in cheaper cleaner energy and the net zero transformation, we outline a range of suggestions to ensure that energy and climate goals are met at least cost over time.

The PC provided the submission to the review on 17 September 2025 and it was published on our website on 29 September 2025.