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Energy Markets

What is the National Electricity Market?

The National Electricity Market (NEM) is a wholesale market for the supply of electricity from generators to market customers (such as retailers). The NEM commenced in December 1998 and consisted of an interconnected market including the following jurisdictions - Queensland, New South Wales, Victoria, South Australia and the Australian Capital Territory.

The construction of Basslink connected Tasmania to Victoria and enabled Tasmania to join the NEM, which occurred in May 2005. The first commercial trading via Basslink occurred in April 2006.

The NEM now consists of five interconnected regions which are largely aligned with state boundaries.

Management of the NEM is the responsibility of the Australian Energy Market Operator (AEMO), whose key roles include:

  • Balancing electricity supply and demand by ensuring dispatch of sufficient generation to meet demand; and
  • Managing financial market settlements between generators and market customers.

More information on the operation of the NEM can be found in An introduction to Australia's National Electricity Market published by AEMO.

More information on AEMO can be found on their website.

The Tasmanian Natural Gas Market

The construction of the natural gas transmission pipeline from Longford in Victoria to Bell Bay in 2002 enabled the introduction of distributed natural gas in Tasmania. The natural gas transmission and distribution network in Tasmania is not covered, which means it is not regulated by the AER (as it is in other southern and eastern states and territories).

In Tasmania the Gas Act 2000 and the Gas Pipelines Act 2000 provide the overarching legislation which governs the distribution and retailing of natural gas, including the granting of licenses.

Other Energy Markets

The supply of other fuels in Tasmania including petroleum products, coal and wood is not regulated under specific legislation.Rather, supply of these fuels is governed by more generic legislation such as the Corporations Act 2001 and the Competition and Consumer Act 2010, with monitoring of these activities undertaken by the ACCC.