How networks unlock affordable energy and growth

In 2026, Australia’s electricity networks¹ face a daunting task: deliver new infrastructure to drive economic growth and support electrifying industries amid mounting concerns over energy affordability.

The numbers tell a sobering story. Network charges already make up as much as 46% of Australian residential electricity bills. Network services providers invested $7.4 billion in the 12 months to 30 June 2024² – yet more is needed.  

All of which poses a tough question: How can networks achieve growth and deliver affordable energy while recovering the costs of rising investments?  

PwC’s Value in Motion research helps provide an answer. We found that artificial intelligence (AI), climate change and geopolitics are reconfiguring the global economy to create new markets that focus on human needs (to feed, care, move, compute, make and build things). In 2025 alone, we estimated that AU$11.1 trillion (US$7.1 trillion) of value was changing hands as organisations reimagined their industry-specific services to focus on outcomes, rather than inputs. 

For Australia’s network utilities, it’s time to get creative and change their service offering to consider when and how the energy they deliver will be used. Traditional offers to customers (think: firm connection point capacity, reliability and quality) could soon be outdated. By better aligning services with the outcomes that large customers are seeking, networks can accelerate connections, optimise tariffs, increase utilisation and promote affordability.   

Our Value in Motion research points us towards a new model: Australian utility networks working closely with customers to find more flexible connection arrangements. Together, they can co-design agreements that allow capacity and reliability to ramp up considering network and customer plans and flex with real-time needs.  

Such agreements can lower costs for all consumers in four ways: 

1. Less network augmentation. Using flexible loads as an alternative to network investments that address demand peaks and troughs. 
2. Faster connections. Accelerating investment contributions from large customers willing to pay for network upgrades to help them bring their energy-enabled products to market. 
3. Increased network utilisation. Attracting lower use-of-system charges by increasing the energy carried across networks. 
4. More generation. Connecting more sources of energy into the system, lowering wholesale costs.  

Savvy customers will see the opportunity. Flexible connection agreements can give them access to additional capacity in periods of low utilisation, rather than a smaller capacity supplied to higher reliability standards.  

Networks can deliver these services faster. And customers can address lower reliability standards with their own generation or storage investments, which allow them to ride-through grid contingencies and self-supply during outages.  

Customers are already signalling that they’d trade higher reliability for lower costs. The​​ Value of Customer Reliability (determined by the Australian Energy Regulator) has dipped in all regions (with an average decrease of about 18%).³  

Emerging examples show how increased flexibility benefits customers. In some Australian distribution networks, residential customers choose a firm export limit (from their solar and/or batteries) of 1.5kW, or a flexible limit of up to 10kW. This can then adjust when there are system constraints.⁴  

New reforms allow this distributed capacity to be aggregated, bid into markets and dispatched while observing these flexible limits.⁵ This maximises the output of distributed resources, while observing network constraints.  

Curtailment or runback arrangements are common in generation scenarios but flexible arrangements less common for loads.⁶ And that needs to change, with total electricity consumption in the national electricity market (NEM) expected to rise 15-30% by 2035.⁷  

Curtailment might sound negative, but flexible energy services support growth and affordability. Networks need to shift their mindset: managing network utilisation within varying connection point limits isn’t a compromise – it’s an economic means of maximising return on network investments.  

This perfectly illustrates the recommendations from our Value in Motion research. Network companies need to focus on the needs that customers seek to satisfy with supplied energy. In doing so, they can improve affordability. But first, they must get four things right: 

• Customer collaboration 
• Intelligent operations 
• Efficient grid access 
• Prudent investment

Let’s explore each of these in turn. 

Networks must work with customers to understand how energy will be used: to compute, feed, care, move, make and build things. This helps identify opportunities for non-firm capacity.  

Time-agnostic loads can flex when they run (think: charging electric vehicles, desalinating water, mining cryptocurrency, irrigating crops, processing wastewater). Location-agnostic loads can flex where they run (think: data processing across geographically dispersed data centres⁸). 

Making this work requires greater transparency. Networks can provide insights into available capacity, constraints and plans. Customers can share realistic forecast load or generation profiles. Together, they can explore flexibility options.  

A recent NEM review of wholesale market settings flagged the risks of ‘hidden’ flexible resources. Energy system instability can be triggered if the withdrawal or injection of power is uncoordinated.⁹ But if flexible resources are identified up-front they can be managed to promote system security and maximise available network capacity. 

Intelligent operations are vital to operate flexible arrangements as well as identify opportunities to introduce flexibility to existing customers. The foundation for intelligent operations is a clear connection agreement that explains:  

• the charges for services 
• circumstances where services may flex 
• the limits within which flexibility occurs  
• the means for signalling those limits

These arrangements can be as simple as agreeing a timeframe for delivering an increased capacity to a customer. Or they can be as complex as interfacing with customer equipment in real-time, communicating forecast and current limits. 

Efficient connections require fair access schemes that accelerate connection of committed projects where capacity is available. National Electricity Rules and the ‘open access regime’ and can present challenges as they: 

• Offer generators a single regional price, which limits the opportunity for locational prices that might encourage connections where capacity exists.¹⁰ 
• Address committed projects on ‘first come first served’ basis, which can result in connection queues where capacity is held for projects that have stalled. 
• Lack clarity in respect of technical access standards for connections. 

Ongoing national reforms are addressing these challenges, and some Australian jurisdictions have created alternative access schemes specific to ‘Renewable Energy Zones’ where access is provided in designated areas, with available capacity, via competitive tenders.¹¹

Local rule makers can look to developments in the UK, where a Connections Reform Package tackles connection queues by prioritising projects that are ‘ready’ and ‘needed’.¹²  

Australian regulators are currently considering changes to modernise the technical access standards.¹³ These would avoid back-and-forth between network and proponent. But overly prescriptive rules could limit flexible connections and increase costs if additional equipment is necessary to meet minimum performance standards.  

As the industry reforms, there is more networks can do right now to accelerate connections, by reviewing processes and deploying digital platforms to:  

• identify and publish available capacity 
• model the impacts of connecting plant 
• streamline the assessment of commitment criteria  
• simplify connection offers

Growth and affordable energy services depend on affordable connections. And the lowest-cost connection pathway may be via the nearest distribution network.  

Distribution connections require proponents to make capital contributions to any upstream network augmentation to unlock capacity. But connections can stall. Capital contributions may be cost prohibitive. Or a first mover may fear their contribution will open the door to other (potentially competing) organisations to connect in the same area at a lower cost.  

The good news is that there are ways to structure investments to encourage a user pays approach while avoiding prohibitive costs: 

1. Pioneer schemes and clustered agreements: Distributors typically employ schemes where a pioneering customer receives rebates as subsequent customers take advantage of capacity they have unlocked. An alternative is to cluster requests from multiple parties, allocating costs on a transparent basis. Late-comers then pay a joining fee distributed as a rebate to existing parties.   
2. Modularity: Network infrastructure can be established in a way that supports scaling, with add-on infrastructure as demand increases. Building with scalability in mind can make future upgrades quicker and cheaper. 
3. Headroom provisioning: Making marginal investments on new builds to unlock significant additional capacity can be cheaper than the probability weighted, discounted cost of doing so later. In an environment with high civil and mobilisation costs, scarce skilled resource and relatively low marginal equipment costs, utilities must seek to justify no-regrets investments (e.g. bigger cables, spare ducts, bays for future transformers) that provide customers bang for buck.  

There’s no doubt about it. It’s a complex task to collaborate with multiple prospective customers in a way that allocates connection costs fairly and matches flexible connection arrangements with needs. It is time-consuming. And it requires a rare combination of technical and commercial skills.  

However, there are smart ways to make all of this happen.  

A reinvention of the connection process can allow enquiries to be processed digitally, solutions and quotes to be informed by AI, and offers to be made in the context of new agreement frameworks. To rise to this reinvention challenge, network utilities leaders must ask: 

1. Do we understand enough about our customers’ energy needs to offer right-sized services? 
2. Do our service classifications, connection policies and negotiation frameworks allow for flexibility? 
3. Do we have the right digital and human resources to provide network services that are both industrialised and bespoke?  

These key questions are challenging. But answering them can help unlock energy affordability and sustainable utility growth.