Addressing Energy Affordability Needs More Than Short-Term Relief

The conflict in the Middle East has continued to highlight the challenges we face in ensuring energy supply remains accessible and affordable for everyone. Fortunately, wholesale electricity prices have remained relatively stable during this most recent conflict due to sufficient domestic supplies, but the growing share of fuel transport costs on the household energy wallet is having a significant impact.

Ensuring Australia becomes more resilient to international energy price shocks will dominate the energy policy landscape for some time, and rightfully so. But while political debate often gravitates toward regulatory interventions and subsidies that deliver short term household bill relief, the real solution lies in something far more complex: reshaping how the energy system works for consumers.

What’s increasingly clear is that energy affordability is not just about price - it’s about design.

The Australian Energy Council (AEC) recently released its long -term vision for achieving net zero by 2050 across both the east and west coast electricity markets, known as Energy2050. Central to this vision is a customer-centric energy system and the need to evolve energy markets to deliver sustainable, reliable and affordable energy.

Energy2050 highlights that the energy system was not built for the world we now inhabit. Consumers are no longer passive bill-payers; they are becoming active participants, generating solar power, storing energy in batteries, and shifting usage patterns. Yet regulation, pricing structures, and customer support systems have struggled to keep pace. The result is a system that can feel opaque, inflexible, and at times, unfair.

That is why the AEC is releasing its Affordability Action Agenda today – an 8-point plan of critical actions that industry and governments need to take to ensure that energy remains accessible and affordable for all Australians. The bulk of these actions are for our industry, recognising that energy generators and retailers need to lead the way in supporting customers now, while working with governments to design a fair and equitable energy system for the future. As suppliers of energy to more than 10 million customers across Australia, we recognise that supporting and advocating for affordable energy starts with us.

Support vulnerable customers and improving customer experiences

Our members are acutely aware that vulnerable households—particularly those experiencing hardship or domestic and family violence—face barriers that go well beyond energy costs. They require targeted, consistent, and well-designed support regardless of who supplies them with energy. AEC members are committed to improving the standard of support for vulnerable customers through the development of a Vulnerability Commitment. A principles-based approach to vulnerability, combined with stronger industry coordination and “safety by design” thinking, can ensure energy products and processes minimise harm rather than unintentionally contributing to it.

Just as importantly, the customer experience itself must be simplified. Overly complex regulation, while often well-intentioned, can create friction and confusion. When customers cannot easily engage with the system, they are less likely to switch, optimise their usage, or access support. In some cases, complexity can even create unsafe outcomes for those in vulnerable situations. A simpler, more intuitive framework is not deregulation—it is better regulation.

Increase transparency & understanding of energy costs

Protecting the vulnerable is only one piece of the puzzle.

We know customers want more transparency around how their energy bills are calculated. For many households, the makeup of their energy bill remains a mystery—an opaque mix of wholesale costs, network charges, environmental schemes, and retail margins. We are committing to publishing clearer, standardised information—such as a cost breakdown to improve understanding and a rebuild some trust by being more transparent.

Drive innovation in products and services

Yet perhaps the most powerful lever for long-term affordability lies in innovation.

The traditional model of energy retail—selling electrons at a variable price—is rapidly becoming outdated. The future lies in integrated energy services: subscription-style products, bundled offerings, and solutions that incorporate solar, batteries, and smart technology. These innovations have the potential to smooth costs, reduce bills, and give consumers greater control. AEC members are committed to accelerating the development of more innovative products and services that improve affordability, but we need to work with governments to create a system that supports experimentation, rewards flexibility, and supports retailers as they evolve from commodity providers into energy service partners.

Encourage demand-side participation

This is where government policy becomes essential.

We know that through the right combination of regulatory reforms and market incentives, including clearer network price signals, that we can unlock the full value of consumer energy resources. Energy retailers want to pass through more value to customers through products like virtual power plants, but this requires changes to the way networks engage with and send signals to retailers.

Provide targeted support to those who need it most

At the same time, we need to modernise concession schemes that support customers who will always struggle with energy costs. Harmonising these concession schemes, to allow for more streamlined and automated bill relief, combined with support for those who can’t electrify themselves will ensure assistance reaches those who need it most, while removing administrative burden and costs.

Simplify and streamline environmental schemes

There is also a pressing need to rein in the complexity and cost of environmental schemes. While some schemes have been incredibly effective and all are well-intentioned, fragmented certificate programs and inconsistent standards have driven up costs without delivering material benefits to customers. Moving forward, simplification, coordination, and a focus on measurable impact will be essential in ensuring that these schemes do not increase customer bills unnecessarily.

Ultimately, energy affordability cannot be solved by any single intervention. It requires a coordinated effort across industry and government—one that balances fairness with innovation, protection with participation, and immediate relief with long-term reform.

The stakes are high. Get it right, and Australia can build an energy system that is not only cleaner and more modern, but also more affordable and equitable. Get it wrong, and affordability will remain a recurring crisis rather than a solved problem.

The opportunity now is to move beyond reactive measures and design a system that works—by default—for everyone.