The National Electricity Market (NEM) and Western Australia’s South-West Interconnected System (SWIS) are the largest electricity markets in Australia. The NEM covers Australia’s eastern and south-eastern coasts and comprises five states: Queensland, New South Wales (including the Australian Capital Territory), South Australia, Victoria, and Tasmania.
The SWIS covers south-west Western Australia. Together the NEM and the SWIS cover eighty-six per cent and eight percent, respectively, of Australia’s electricity demand.
For a detailed explanation of the National Electricity Market in Australia, download this PDF
Major reforms, including 5 Minute Settlements (5MS), have been introduced in the National Electricity Market (NEM). These reforms are the culmination of rule changes, innovative digital systems and extensive stakeholder engagement and partnership. AEMO will also report on unaccounted for energy (UFE) values as part of the Global Settlement to be implemented from 1 May 2022.
AEMO is responsible for settlement in the National Electricity Market (NEM) – making sure market generators are paid for the energy they provide, and retailers pay for the energy their customers use. Global Settlement introduction means AEMO settles the market using the same process for all electricity retailers. The introduction of Global Settlement process is expected to lead to fewer settlement disputes and provide greater level of visibility of energy uncertainties, known as Unaccounted for Energy (UFE). There are many sources of UFE, some examples include electrical losses, unmetered loads and estimation errors. What is Unaccounted for Energy? Not all energy consumed is currently accounted for by electricity retailers.
UFE refers to the difference between the amount of energy being drawn into a distribution zone and how much is picked up on the meters that has been consumed by end customers after technical loss factors are applied.
There are many possible sources of UFE, these include electrical losses, unmetered loads and estimation errors.
The cost of UFE, which was previously absorbed by the incumbent retailer, will be passed on to consumers. AEMO allocates the UFE to energy retailers in the distribution area and is pro-rated based on their “accounted-for” energy. The UFE charge will then be passed through by Origin to Business Customers within the Regulated Charges section on their invoice. This charge will be a new line item labelled - AEMO UFE Charge.
Unaccounted for Energy will not be charged for these sites:
AEMO will commence allocating UFE charges to all energy retailers, including Origin, from 1 May 2022 and will be passed through to our Business Customers across all states.
https://www.aemc.gov.au/rule-changes/global-settlement-and-market-reconciliation
https://www.aemc.gov.au/rule-changes/delayed-implementation-five-minute-and-global-settlement
https://aemo.com.au/initiatives/major-programs/nem-five-minute-settlement–program-and-global-settlement/global-settlement
(02) 9371 4153
