What the NEM is
The NEM links five regions, Queensland, NSW (which includes the ACT), Victoria, South Australia and Tasmania, through interconnectors. Power can flow between neighbouring regions, so a hot day in Adelaide can draw on generators in Victoria, and Tasmanian hydro can help the mainland through Basslink.
It is one of the longest interconnected power systems in the world, stretching from far north Queensland to Tasmania. The regions each have their own wholesale price, which can differ sharply when interconnectors are full.
How the wholesale price is set
Generators offer power
Each generator tells the market how much it can supply and at what price, in bands.
AEMO dispatches the cheapest
Every five minutes AEMO's dispatch engine picks the cheapest combination of offers that meets demand, within the limits of the transmission network.
The last offer sets the price
All generators dispatched in that interval are paid the price of the most expensive offer needed. That is the spot price.
Retailers pay and pass it on
Retailers buy from the market, usually protected by contracts, and build the cost into your plan's rates.
Spot prices swing widely. On 13 February 2024, when storms brought down transmission towers near Geelong, the Victorian price jumped from $256/MWh to the market cap of $16,600/MWh within minutes. Most households never see these spikes directly because retail prices are set in advance. Wholesale-linked plans, such as Amber, pass them through.
Who runs the market
- AEMO, the Australian Energy Market Operator, runs the market and the power system day to day, and plans the future grid.
- AEMC, the Australian Energy Market Commission, makes the National Electricity Rules and the retail rules.
- AER, the Australian Energy Regulator, enforces the rules, regulates network revenue and sets the Default Market Offer.
State governments still set some things, such as concessions and, in Victoria, the Victorian Default Offer.
WA and the NT
Western Australia's south-west runs its own market, the Wholesale Electricity Market, on the South West Interconnected System. Regional WA and the Northern Territory have smaller separate systems. In both states, household prices are set by government rather than by retail competition. See our WA and NT rates pages.
Common questions
Queensland, New South Wales, the ACT, Victoria, South Australia and Tasmania. The ACT is part of the NSW region. Western Australia and the Northern Territory are not connected to it.
Every five minutes. AEMO dispatches generation every five minutes, and since October 2021 the market has also been settled on five-minute prices rather than half-hourly averages.
Not on most plans. Retailers set your rates in advance and update them from time to time, usually once a year. Only wholesale-linked plans pass the five-minute price through directly.
Sources
Every rate on this page comes from the regulator or the regulated retailer. Last checked October 2026. Prices include GST unless we say otherwise.