National Electricity Market (NEM)

The NEM interconnects five regional market jurisdictions (Queensland, New South Wales, Victoria, South Australia and Tasmania). Western Australia and Northern Territory are not connected to the NEM.

The NEM involves both wholesale generation that is transported via high voltage transmission lines to electricity distributors, who deliver it to our homes and businesses.

The transport of electricity from generators to consumers is facilitated through a ‘pool’, or spot market, where the output from all generators is aggregated and scheduled at five minute intervals to meet demand.

The pool is not a physical thing but a set of procedures that AEMO manages in line with National Electricity Law and National Electricity Rules (the Rules).

The market uses sophisticated systems to send signals to generators instructing them how much energy to produce each five minutes so that production is matched to consumer requirements, spare capacity is kept ready for emergencies, and the current energy price can be calculated.

NEM infrastructure comprises both state and private assets managed by many participants.
The NEM:

  • Supports 19 million residents.
  • At over 5,000 km from far north Queensland to Tasmania, and west to Adelaide and Port Augusta, is the longest alternating current system in the world.
  • Has about 40,000 km of transmission lines and cables.
  • Supplies about 200 TWh of energy to businesses and households each year.
  • Is long and linear compared with Europe and North America.
  • Can be costly to upgrade because of the large distances.

You can also view an Introduction to the National Electricity Market fact sheet here.

For more information on the NEM, please contact the Support Hub.