This report examines consumer perspectives on accelerated depreciation and financeability in Australia’s energy sector, focusing on gas asset stranding and transmission investment. It finds current engagement is narrow, complex, and often poorly understood by consumers. Broader, clearer, and more balanced engagement is recommended to improve fairness, transparency, and regulatory decision-making.

Current energy network incentive frameworks rely on information asymmetry that can lead to over-forecasting and inefficient outcomes. Imbalances between capital and operating expenditure incentives, along with weak forecasting discipline, risk favouring network providers. Stronger benchmarking, aligned incentives, and alternative models like totex could improve efficiency, cost accuracy, and long-term consumer value.

This report examines the February 2021 Texas energy crisis, analysing how the electricity and gas systems performed under extreme conditions and investigating the factors behind widespread outages. It explores comparisons with Australian energy markets and considers what lessons, if any, can be drawn for future system planning and resilience.

Australia’s electricity system is undergoing a major transition from ageing coal generation to a mix of renewables, storage, and dispatchable capacity, requiring around $25 billion in new investment by 2030. Investment levels and technology mix are highly sensitive to policy settings, carbon targets, demand trends, and investor confidence.

Energy network incentive frameworks rely on imperfect information, creating risks of over-forecasting and inefficient spending. Current approaches may favour capital investment and allow excess returns, while proposed reforms offer limited improvement. Greater use of benchmarking, balanced incentives, and alternative models could better align costs, improve efficiency, and deliver stronger value for consumers.

Declining demand for natural gas, driven by decarbonisation and electrification, creates structural risks for consumers connected to shared gas networks. As customers leave, fixed network costs are spread across fewer users, leading to rising prices and potential “death spiral” dynamics. The report highlights financial, regulatory and operational challenges, including higher tariffs, disconnection costs, and risks of reduced reliability or supply withdrawal. It emphasises that vulnerable groups, renters and some businesses may face barriers to switching, leaving them exposed to escalating costs and limited alternatives as the network contracts.