State of the energy market is the AER’s annual summary of ‘the year that has been’ across electricity and gas supply chains, including wholesale markets, transportation and retail. Chapter 2, the market overview, sets out a short summary of key outcomes. Chapters 3 through 7 set out analysis of each supply chain component. In combination, they give a broad and relatively comprehensive picture of market outcomes since publication of the last State of the energy market.

Australia’s energy systems are undergoing rapid technological and economic transition alongside national efforts to decarbonise the economy. To put annual analysis in context of the fundamental transformation taking place, this first chapter summarises major developments and challenges in progress towards the energy transition. It does so using the Strategic Energy Plan’s vision for a future energy market as a reference point. The Strategic Energy Plan was developed in 2020 by the COAG Energy Council, in consultation with the Energy Security Board (ESB). The plan has 5 objectives which, taken together, point to a transition through which the future energy market is able to provide:

1. affordable energy and satisfied consumers
2. a secure gas and electricity system
3. reliable and low-emissions energy
4. effective development of open and competitive markets
5. efficient and timely network investment.