3 high-level questions, for considering the draft report of the Nelson Review

In 9 days time (on Wednesday 8th October 2025) I’ll ve speaking at the end of the second day of the inaugural NEMdev conference in Brisbane, as noted before.

… will we see you there?

I’ve started to think about what I might talk about, and thought it might still be useful (albeit late*) to provide some thoughts on the Draft Report from the ‘Nelson Review’ Panel, which was released back on 6th August 2025:

 * a little later than the noted closure dates for submissions, which was Wednesday 17th September 2025 (~2 weeks ago now)

In conjunction with the discussions at the NEMdev conference, we might progressively share some thoughts here on WattClarity® with the intention being to feed into discussions through the two days of the conference.

In reviewing what’s written in the draft, and discussed subsequently in several public presentations (including in the recorded session on the day of its release, but also elsewhere subsequently as well), I’ve tried to keep the following three questions in mind.

Q1)  Why did we need a review in the first place?

First and foremost, I’ve been wondering … why did we need such a review in the first place?  Or, flipping the question around another way … what has been lacking in our ‘standard’ governance and operations framework (i.e. between the AEMC, AEMO, AER and so on) such that there must have been some failure somewhere to warrant roping in these esteemed panel members to have them devote a year of their lives to this review process?

It’s not the first time we’ve had a ‘Major Review’ within the NEM:

• for ease of future reference, I’ve put together this list of ‘Some of the ‘Major Reviews’ in the history of the NEM’;
• and I know we have the Terms of Reference provided at the start of the process;
• but surely we should start by wondering:
  • why we need such a review now?
  • or, in other words, what’s failed in our ‘regular’ market processes … to warrant such an intervention?

It’s a question we’ll keep in mind in reviewing what’s in the draft Report …

Q2)  Which, of four quadrants, pertains?

It’s taken a while (in amongst loads of other things to do) for us to read through the whole of the Draft Report from the ‘Nelson Review’ Panel, but it seems to me that there are aspects of the draft Report that would fall into each of the following quadrants:

With respect to the Terms of Reference (now linked here),:

1)  We note that point 1 (of 16) was as follows:

‘This terms of reference sets out an expert panel-led review supported by the Commonwealth Department of Climate Change, Energy, Environment and Water (DCCEEW), into market settings to promote investment in firmed, renewable generation and storage capacity in the National Electricity Market (NEM) following the conclusion of Capacity Investment Scheme (CIS) tenders in 2027’

(a)  which might be read as suggesting a pretty limited scope.

(b)  and which, coincidentally, dovetails into questions we’ve been asking about how firm are these projects anointed in the CIS auctions, in any case?

i.  Such as I’d asked through these 6 lenses about 2 weeks ago.

ii.  As Dan discussed in ‘Part 1: Tracking the progress of CIS projects post-award’ last Thursday 25th September.

2)  But we will also keep in mind the other 15 points – especially 10, 11, 12, 13, 14 – also speak to the scope.

Q3)  And which, of three time horizons?

Adding another dimension onto the “is it in-scope or out-of-scope?” question, is the consideration about whether the Nelson Review panel has been focused on solving tomorrow’s problems, or (as seems to be too often the case in reform efforts):

• either focusing on the here-and-now, with not much view for the future;
• or, even worse, focusing on solving problems of yesterday.