Study finds banning energy disconnections shouldn't destabilize markets

• Spain prohibits disconnecting vulnerable customers and covers costs for the most vulnerable, while France and Ireland ban winter disconnections and allow supply reduction instead of complete cutoffs
• About 23,000 Australian households lost electricity in 2023-24 for non-payment, with minimum debt thresholds of AU$500 before disconnection
• Researchers recommend extending protections to embedded network residents (apartment complexes, caravan parks) and prepayment meter users who currently lack standard consumer safeguards

Market Summary: Energy Disconnection Ban Study

Key Findings

A new RMIT University study published in *Energy Research & Social Science* (February 2026) indicates that banning energy disconnections for non-payment would not destabilize competitive power markets, based on analysis of protections in Spain, France, Ireland, and Australia.

Critical Data Points

• 20 million European households were disconnected from electricity and gas during 2022 (EU Agency for the Cooperation of Energy Regulators)
• 23,000 Australian households experienced electricity disconnection in 2023-24
• Australia maintains minimum debt thresholds of AU$500 before disconnection

Market Protections Examined

Spain: Vulnerable customers cannot be disconnected; electricity costs subsidized for most vulnerable households; supply reduction instead of complete cutoff available

France & Ireland: Winter disconnection bans; gradual supply reduction options rather than complete termination

Australia: Some retailers voluntarily avoid disconnections; prepayment meters not used in ways causing self-disconnection

Market Implications

The research suggests energy retailers can remain viable while implementing consumer protections, challenging the assumption that disconnections are necessary for market stability. Lead researcher Associate Professor Nicola Willand emphasized that "ending harmful disconnections is a policy choice, not an inevitability of how energy markets operate."

The study recommends extending protections to embedded network residents (apartment complexes, caravan parks) who currently lack standard safeguards. Findings are particularly relevant as European countries review consumer protections amid rising energy prices and directives to protect vulnerable customers from disconnections.

Sectors affected: Energy utilities, retail electricity providers, regulatory bodies across Europe and Australia.