The entire industry is currently being reshaped and the long-term sustainability of the incumbents’ business model is being called into question. There are a number of structural factors putting top-line pressure on the established retailers (AGL Energy, Origin Energy and the unlisted EnergyAustralia). The key issue is that generation capacity exceeds demand, with generators struggling as they face lower wholesale prices and competition from subsidised renewables operating at no short-run marginal cost. The excess in generation capacity has been exacerbated by the installation of solar panels in the residential market. Demand is falling each year as manufacturing and industrial sectors consume less energy and households become more energy efficient (see chart below). Click on the Longform article to read our views on the listed established retailers.