Understanding the Australian National Electricity Market (NEM)


The NEM operates on a merit order principle, meaning the cheapest source of available generation is dispatched first to meet demand. This information is readily available on AEMO’s website, allowing anyone to view the current mix of generation sources powering the NEM. Knowing the NEM generation information empowers consumers to understand the potential environmental impact of electricity generation and make informed choices when selecting their electricity retailer.

Understanding the capacity of existing, withdrawn, committed, and proposed generation projects is essential for effective energy planning. Here’s what you need to know:

Existing generation: The NEM hosts a diverse mix of power plants, including coal-fired stations, gas turbines, and renewable energy facilities. These existing generators contribute significantly to meeting demand.

Withdrawn generation: Some generators may be retired or temporarily withdrawn due to maintenance or other reasons. Monitoring withdrawn capacity helps assess potential supply gaps.

Committed generation: These are projects under construction or with firm development plans. Committed generation adds to the NEM’s future capacity.

Proposed generation: Developers propose new projects like wind farms or solar installations. Evaluating proposed generation informs long-term energy strategies.


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