On 30 June 2020, the AEMC completed the seventh annual review of retail energy competition in the national electricity market (NEM). The review focuses on small customers in retail energy markets, which includes residential and small business consumers. We have provided a microsite that contains all the details and information that sits behind the report. It can be found here.

This report looks at:

• the state of retail competition over the past year (Chapters 1 to 6)
• the impacts of the COVID-19 pandemic on consumers and the retail market (Chapter 7)
• forward looking research studies on electric vehicles and consumer protections in an evolving market (Chapters 8 to 11)

State of retail competition
To assess the effectiveness of retail competition, the review employs a structure-conduct-performance framework. This framework uses a range of metrics to assess how the structure of the market influences the conduct of the participants and the outcomes that customers and participants achieve from the market.

Impacts of COVID-19
To assess the impacts of the COVID-19 pandemic on the retail market, the review: 

• explores the impacts on consumers and retailers
• considers new measures put in place by governments and industry to reduce the impacts
• makes recommendations to improve consumer and competition outcomes when retailers fail, and for consideration of measures to protect retail market financial stability. 

Research studies
The review looks at three focus areas:

• How the retail market is responding to the uptake of electric vehicles (EVs)
• Consumer protections in an evolving energy market for
  • the traditional sale of energy
  • new energy products and services.

In summary, the report has found that:

• new retailers are continuing to enter and expand in the market
• while market concentration continues to decrease, this has slowed over the past year with overall switching decreasing 
• consumer satisfaction with their energy services and value for money have improved, continuing an upward trend over the last few years.
• generally, price dispersion decreased with the:
  • highest offers reduced to the introduced regulated price cap for standing offers 
  • lowest offers remaining generally steady
  • median offers tended to increase, but this varied between network distribution areas.
• COVID-19 is impacting on consumers and retailers. We have proposed changes to the retailer of last resort framework to better protect consumers and retail market financial stability in the long term. We recommend consideration may still be needed for short term measures if the COVID-19 impacts worsen.
• The way in which consumers use energy and receive information about their energy use is changing. We have made recommendations to allow consumer protections to evolve with the market, to strike the right balance between facilitating innovation and minimising harm. 

A guide to this report

The report focusses on the state of retail competition across the jurisdictions. We have provided information that is specific to individual jurisdictions on the microsite. In addition, within the microsite there is a data portal. This allows stakeholders to access the data that the Commission has used to conduct its analysis.

The Commission has provided various formats and levels of summaries for the different audiences that engage with this review. The formats and their target audience are: 

• Communications materials and microsite, including:
  • Jurisdictional summaries: for stakeholders interested in a snapshot of outcomes in each jurisdiction.
  • Summaries of each research piece: for stakeholders interested in a summary of each research study. 
  • Separate infographics providing and overview of the report, the impacts from COVID-19 on consumers and the retail market, and an interactive pdf on consumer protections.
  • Data portal: for stakeholders seeking to access the data behind the report.
• This final report, including:
  • Executive summary: for stakeholders interested in reading a short document to understand the report, including context and analysis, snapshots of each research study and the Commission's retail market priorities for 2019.
  • Summary of recommendations: for stakeholders wanting to know the Commission's recommended actions in the coming year. 
• Full report: for those wanting the Commission's in-depth analysis. 

Earlier engagement on issues papers

For our research studies we sought submissions:

• on our electric vehicle issues paper to understand stakeholders views regarding if retail competition is resulting in innovation related to the efficient use and uptake of electric vehicles and whether there are retail regulatory barriers that inhibit efficient uptake and use. See submissions to issues paper below
• on two issues papers regarding consumer protections in an evolving market. See the project page for more information and issues papers here.