
Why Australia needs locational pricing
Issue 15: Australia's electricity market needs better price signals that reflect local conditions
Australia’s electricity prices ignore location, even though the grid doesn’t. This mismatch drives congestion, curtailment, and inefficient investment. There is a better system used in much of the world. Locational marginal pricing aligns prices with physics, improving coordination of batteries, generation, and demand. It adds complexity, but the cost of today’s overly simple price signals is rising as the system becomes more distributed and constrained.
May 10, 2026



























