ESB releases Options Paper on post 2025 market design … is it a ‘NEM 2.0’ design to get us beyond 2040?

Bright and early this morning, we received an email announcing the release of an Options Paper relating to post 2025 market design for Australia’s National Electricity Market:


It seems that the term ‘NEM 2.0’ has fallen out of favour in more recent times – perhaps because of a more incremental approach to reform?  I wonder about the extent to which what’s in the two documents that follow will provide us a market design that will be fit-for-purpose out to 2040 and beyond, given the many different challenges that the NEM is (already) increasingly grappling with.

The email linked to these 3 documents:

Media Release

Options Paper


2021-04-31-ESB-Post2025-MediaRelease-Image 2021-04-31-ESB-Post2025-PartA-OptionsPaper-Image 2021-04-31-ESB-Post2025-PartB-Appendices-Image
There are four ‘critical areas’ referenced:

1)  Preparing for old coal retirement

2)  Backing up power system security

3)  Unlocking benefits for all energy consumers of recent changes (incl solar PV, batteries and smart appliances); and

4)  Opening the grid to cheaper large-scale renewables.

It quotes Dr Kerry Schott:

”rather than a single big bang reform, the pathway developed accommodates different jurisdictional schemes and priorities, while reflecting the urgency of the situation”

These four ‘critical areas’ are translated into:

Chapter 2)  Resource adequacy and aging thermal generator retirement … 18 pages

Chapter 3) Essential system services, scheduling and ‘Ahead’ mechanisms… 14 pages

Chapter 4)  The integration of distributed energy resources and demand side participation… 20 pages

Chapter 5)  Transmission and access… 17 pages

… which, together, make up the bulk of the document.

Each of the 4 ‘critical areas’ have their own coverage in separate appendices.

Key dates (as I understand them) are as follows:

Q3 2021

Our intended release date for ‘GenInsights21‘ will be sometime in Q3 2021 (but, speaking realistically, not before the 31st July 2021 date below).

As we are pulling together this update to the GRC2018 we will be keeping in mind what our review of historical data about generation performance is revealing about these options for the future.

~31st July 2021

The email says:

“In around three months, the Energy Security Board (ESB) will be providing final recommendations for comprehensive reform of Australia’s energy markets to ministers on the Energy National Cabinet Reform Committee.”

… which would make it around 31st July 2021 when final recommendations would be made.

The options paper says this as:

“The ESB will continue to work with the Post-2025 project advisory groups, jurisdictions and other stakeholders to inform the detailed market design and evaluation of these options ahead of recommendations to Ministers in mid-2021.”

Wed 9th June 2021

Submissions are due – by email to

Note that this due date (a key one?) was not featured in the email received this morning, nor in the Media Release … I had to first see it in various comments on social media before finally seeing it at pages 12 and 97 of the options paper.

Tue 4th May 11:00-12:00
Fri 7th May 13:30-14:30

Two briefings by the ESB are being held next week as part of this project’s final stage.

Fri 30th April 2021

ESB releases the options paper, and this article is published.

5th Jan 2021 The ESB published ‘post 2025 market design directions paper’.

Must not have published an article on WattClarity about it, but have found the Directions Paper here.

7th Sept 2020 The ESB released the ‘Post 2025 Market Design Consultation Paper’.
20th April 2020

The ESB provided two papers to the COAG Energy Council:

Paper 1 = ‘Moving to a two-sided market’

Paper 2 = ‘System services and ahead markets’


We’ll try to stay on top of how this unfolds.

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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