How does the National Electricity Market (NEM) work?

Answer:  The NEM is one of the most highly regulated and competitive markets in the world.  It covers around 40,000 km of transmission lines and cables, supplying around 9 million customers.

Put simply the NEM operates like a market where generators are paid for the electricity they produce, which is then transmitted to energy consumers.  The electricity market works as a ‘spot’ market, where power supply and demand is matched instantaneously providing a ‘live’ price that is set every five minutes based on supply and demand.

The Australian Energy Market Operator coordinates this process and makes sure it’s competitively priced, safe, and reliable.