Electricity Distribution in Australia - Industry Market Research Report

Recharged: Updated revenue determinations to power recovering industry performance

Electricity distribution networks form the last link in electricity transport to homes and businesses. Since these regional monopolies provide such a vital service, the Australian Energy Regulator (AER) determines their revenue allowances, returns on investment and capital expenditure in five-year blocks. Until 2015, regulators let distribution networks earn higher revenue, prompting significant investment in expanding their network assets. Since then, revenue allowances have been slashed. A low interest rate environment cut borrowing costs, meaning distributors could recoup their investments at a lower rate of return than previously. To reinforce this, the AER mandated a new Rate of Return Instrument in 2018, squeezing profit margins. Investment is now being channelled to maintaining or replacing existing infrastructure, with revenue falling 2.4% over the past five years, including 1.8% in 2022-23, to $14.8 billion.

Industry companies operate low-voltage electricity distribution systems that deliver electricity to consumers, including lines, poles, meters and wires. Industry firms transport electricity that is sourced from upstream high-voltage transmissions networks.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.