The National Electricity Market (NEM) is responsible for supplying around 80 per cent of Australia’s energy needs. The market includes more than 40,000km of transmission lines across four states (New South Wales, South Australia, Victoria and Queensland). This network connects energy generators to the NEM and transports the power they produce to consumers including households, businesses, public services and public infrastructure across these states.
Energy is produced in Australia by generators who sell their power to wholesale providers who then sell to Australian consumers. The role of the NEM is to balance consumer energy demand with generator production and the supply of electricity.
When demand and supply are well-balanced, each state relies largely on its own energy supply. When there is a power shortage, caused for example by increased demand during heat waves, an interconnector allows states within the NEM to exchange electricity.