Investor Presentaiton
Australia's National Electricity Market
Spa*ark Energy_26
The NEM covers five interconnected States: Qld, NSW (including the ACT),
Vic, SA and Tas, which also act as separate pricing regions (inset). It is a
wholesale market in which generators sell electricity and retailers buy in
order to on-sell to consumers.
The price is determined by (a) offers from generators to supply specified
amounts of electricity at set times to retailers and industrials, and (b) the
demand. A half-hourly averaged price, referred to as the Spot Price, is used
as the basis for settling transactions which are made through the Australian
Energy Market Operator (AEMO). There is a maximum cap price, currently
set at $15,000/MWh and a minimum floor price of $-1,000/MWh.
Generators may negotiate a power purchase agreement (PPA) with a
retailer or industrial user or may sell on the spot market. Typically they do
both, with the fixed PPA providing revenue certainty and the spot market,
the opportunity to benefit from periods of high prices. The Tasmanian spot
price for the last two years has averaged AUD88/MWh.
Lemont is expected to be connected to the NEM. There is currently one
~500MW interconnector between Tasmania and Victoria (Basslink) with a
second proposed 1500MW interconnector, Marinus Link, recently
announced as a priority infrastructure project. https://www.marinuslink.com.au/
The four easternmost states plus South Australia and the ACT are
interconnected and form Australia's National Electricity Market.
Inset: Each of the States has its own pricing arrangement. The brown dots
(which move in the direction of transfer) show the amount of power being
exchanged via each interconnector at that particular five minute segment.
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