A short history
AEMO was established by the Council of Australian Governments (COAG) on 1 July 2009 to manage the National Electricity Market (NEM) in the eastern and south-eastern states and Australian gas markets.
In the years following our establishment, AEMO’s responsibilities have progressively grown. This has included adding various gas market functions, and becoming the market and independent power system
operator for Western Australia from 2015.
Our ownership was – and still is – shared between government and industry, with members representing federal and state governments, as well as
generation and production, distribution, retail and resources businesses across Australia. We have always operated on a user-pays cost-recovery basis, and we recover all operating costs through fees
paid by industry participants.
Our work
At AEMO, our work includes operating the systems that allow energy to be generated, transmitted and distributed, and the financial markets that allow energy to be sold and bought.
From a physical operations perspective, we operate the electricity systems in the NEM and south-west Western Australia. This includes monitoring supply and demand, voltage and frequency, and managing
planned and unplanned outages, and emergencies. In short, we help ensure that Australian consumers, businesses and industry have access to secure and reliable energy at all times.
We also operate Victoria's gas transmission system, which includes reviewing the adequacy of gas supply and pipeline capacity for the system.
We also operate Australia’s electricity and gas markets. Like the stock exchange, the markets allow energy or other energy-related services to be bought
and sold in a competitive environment. For example, these markets can be used to allow electricity generators to sell their electricity to retailers, or for gas suppliers and distributors to schedule
their deliveries for the day. We schedule the energy at the lowest available prices, settle trades, and ensure data and information flows between participants.
While the market mechanisms support affordable and reliable energy, AEMO does not set or regulate retail energy prices. Instead, retailers set the energy prices for Australian consumers (or, in some
states, the government can set a regulated contract).
Our work also goes beyond day-to-day operations and includes proactively shaping Australia’s energy future. Our planning and forecasting work supports efficient investment, operations and policy
decisions by governments, regulators, industry participants and the community, while our programs, initiatives and trials help us to learn from the changing environment
to create a best-in-class approach to energy.
The need for collaboration
At AEMO, we’re proud to be a driving force in Australia’s energy future, but we know that we can’t do it alone.
To ensure we’re delivering the best outcomes for Australian consumers, we work closely with the Energy Security Board (ESB), the Australian Energy Regulator (AER) and the Australian Energy Market
Commission (AEMC) to solve key challenges in this transition.
We also work closely with industry participants, and have developed strategic partnerships with the CSIRO, the Bureau of Meteorology (BOM) and the Australian Renewable Energy Agency (ARENA). Our
partners share our commitment to developing new solutions to the energy challenges we face. Together, we have the opportunity to succeed.
AEMO Services
In July 2021, the New South Wales Government
appointed AEMO to the role of NSW Consumer Trustee. To carry out the functions
conferred transparently and independently, AEMO established a subsidiary, AEMO Services Limited (AEMO Services).
AEMO Services has been created with initially AEMO Limited and the NSW Government as members, but it is open to all other jurisdictions to join as members also. The Chair of the AEMO Board will
initially serve as interim non-executive Chair of the AEMO Services Board, pending a director search and appointment process.
To ensure AEMO’s key staff and roles are not impacted by this new appointment, AEMO Services will appoint its own staff, with capabilities consistent with its required mandate. All costs in fulfilling
the NSW Consumer Trustee Role will be met through arrangements with the NSW Government.