Wholesale electricity in eastern and southern Australia is traded through the National Energy Market (NEM), one of the largest interconnected power systems in the world.
Every 5 minutes, generators (like coal plants, wind and solar farms) sell electricity into the NEM pool where retailers can purchase it and on-sell to end users like business and householders.
Electricity ‘spot’ prices are set based on the price electricity generators submit into the pool, and the rate of demand at a given time.
Prices can vary greatly across the day, month and season depending on supply and demand.
Extreme weather, electricity availability, and supply scarcity can also affect the price.
Learn more: Energy Council’s National Energy Market factsheet.
