Prices in Australia's national electricity market eased in 2025 from the previous year as overall competition improved, although pressure remains outside the daytime period, the Australian Energy Regulator (AER) said in a Thursday report.
Competition improved as new generation and storage entered the market and ownership became more diverse, but remains more limited during the evening peak and overnight, when the system depends more heavily on dispatchable generation, AER said.
Revenue in the market was also lower than in 2024 across all periods of the day, while electricity contract markets have broadly stabilized following disruption in 2022, the regulator said.
It added that the overall market is transforming into many different segments within each region, often defined by the time of day and service type, with price outcomes increasingly dependent on whether sufficient flexible capacity is available when needed.
"If flexible supply, storage, transmission and demand response do not scale to provide necessary capacity in the right places and at the right times, consumers may face higher prices and greater reliability risks, because the market will be more vulnerable to supply and demand shocks," AER said.
The report showed that dispatchable generation remains concentrated but has improved since the last analysis. Origin Energy (ASX:ORG), AGL Energy (ASX:AGL), and Snowy Hydro collectively control 43% of dispatchable generation capacity across the national electricity market, with concentration levels improving from 2024 in all states except for New South Wales.
