What’s the NEM?

The National Electricity Market (NEM) is an energy grid made up of all regional networks in Queensland, New South Wales, ACT, Victoria, South Australia and Tasmania.

WA and NT are individual markets.

Established in 1998, the NEM is known as a ‘synchronous transmission’ grid. This means supply and demand fluctuations in one state can affect other states as energy is drawn from other networks to ensure capacity is maintained.

The NEM operates a power system more than 5,000kms in length (one of the world’s largest interconnected power systems)—from Port Douglas, in Queensland, all the way to Port Lincoln in South Australia. Over AUD $11 billion worth of electricity is traded annually on the market to supply 19 million end-use consumers.

Exchange between electricity producers and electricity consumers is facilitated through a spot market where the output from all generators is aggregated and instantaneously scheduled to meet demand through a centrally-coordinated dispatch process. This process is operated by the Australian Energy Market Operator (AEMO) in accordance with the provisions of Australian National Electricity Law and Australian National Electricity Rules.

 

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