Power prices are likely to rise unless there is massive investment and a coordinated plan to improve electricity generation, transmission and capacity.
A crisis hit the east coast gas and electricity markets in June with extremely high wholesale prices, the temporary suspension of the electricity market and the failure of several small retailers.
Energy sector regulators say the crisis highlighted the risks in the shift to secure, reliable and low emissions energy that is affordable for consumers.
In August, energy ministers announced the broad details of a new national energy transformation partnership.
The Energy Security Board said in a report released on Thursday it was "optimistic" about the partnership, but there were several pressing risks.
"Energy affordability is a major concern for consumers," the report said.
"There are currently more upward than downward pressures on energy prices in an environment where consumers already face higher costs of living."
Another risk was the close connection between the gas and electricity markets, and planning for both of these markets could not occur in isolation.
"The health of the national energy market depends not just on an independently healthy electricity market, but also on having frameworks that support healthy gas markets and efficient interactions between the two."
A further risk was the need for "urgent and cost-effective investments in transmission, renewable energy and flexible capacity".
"Our best strategy to manage the risk of the transition is to build replacement assets quickly, while still maintaining discipline over costs, in advance of (coal power) retirements," the report said.
ESB chair Anna Collyer said the move to cleaner energy was a complex exercise that affected all parts of the economy.
"Managing those risks and delivering an orderly transition requires urgent market reform and regulatory settings that encourage efficient investment in our energy future."
The report was issued alongside the Australian Energy Regulator's State of the Energy Market report.
AER chair Clare Savage said over the year wholesale markets had surged to record high prices, which made it all the more important for consumers to shop around.
"We are likely to see fewer and more expensive retail offers available to consumers," she said of the coming year.
The AER will soon release a strategy to deal with "customer vulnerability", to ensure people struggling to pay bills can get timely and effective support and stay connected.
Electricity retail prices fell for the third consecutive year in 2021, dropping by nine per cent from the previous year and reaching their lowest level since 2012.
But there has been a reversal of this trend in the first half of 2022 due to wholesale price increases.
The AER found small electricity retailers' lowest market offers in 2021 were between $100 and $270 cheaper than those of the big three retailers.
