What we do
AEMO’s functions are prescribed in its Constitution and in legislative instruments, such as the National Electricity Law and National Gas Law, as well as Western Australian provisions such as the Electricity System and Market Rules. These functions have evolved and will continue to evolve, in response to the challenges and complexities of the energy transition.
We continue to fulfil our core responsibilities to operate systems and markets and plan the national transmission system in the NEM.
At the same time, we increasingly partner with governments to support the delivery of new investment in energy infrastructure to meet future needs.
Our functions have expanded and adapted to ensure we continue delivering our core objectives while addressing the demands of a more complex and transitioning energy market.
AEMO carries out four primary functions:
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1. Operate energy systems
AEMO operates Australia’s principal electricity and gas systems around the clock to match energy supply and demand in real time. Our control rooms monitor the flow of electricity and gas minute to minute, every day. From our control rooms, we manage the essential services that support a secure electricity system, such as frequency control, inertia and system strength, voltage management and system restart capabilities.
As the energy system transitions towards a net zero economy, AEMO will increasingly need to manage the secure operation of the power system at times when demand is met entirely by renewable energy.
The security of Australia’s energy systems is paramount, and AEMO invests heavily in information and operational technology. With funding from the Federal Government, we have a program underway to uplift our core digital systems to enhance their effectiveness and reliability.
We are also investing in cyber security to maximise our defences against hostile actors and ensure control rooms are fit for the future. We have been granted new functions in the NEM including managing power system cyber incidents, mitigating or reducing their impact, and
supporting industry participants and governments in enhancing cyber maturity and incident response.AEMO has an important role in implementing ongoing reforms to better manage gas reliability and supply adequacy across east coast gas markets. Our functions include tools to address short-term gas supply issues such as information transparency, signalling actual or
potential threats, directions powers, and the ability to trade natural gas in certain circumstances. -
2. Operate energy markets
AEMO operates a number of wholesale energy markets, matching up the buying and selling of electricity and gas as well as energy-related services. We manage the NEM, the WEM and gas markets, including the Victorian Declared Wholesale Gas Market (DWGM).
These markets are designed to operate competitively, keeping the cost to consumers as affordable as possible. AEMO schedules the energy at least wholesale cost, settles trades, and ensures data and information flows between market participants.
Our cyber and digital development teams ensure the security, integrity and functionality of the AEMO systems that underpin market trading.
We are responsible for the systems that facilitate market activities and provide participants with clear, accurate and timely data relating to the market. These include the Gas Bulletin Board and the WA Gas Bulletin Board as well as a number of market IT systems and interfaces. In managing the markets, we gain unparalleled insights into factors affecting the energy sector.
As a result, we also provide longer-term analysis and advice around market performance, issues and trends. This allows participants and other stakeholders to make effective decisions and improves the efficiency and transparency of energy markets.
Additional information
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3. Plan and enable the energy system of the future
AEMO has a central role in supporting the transition to the energy system of the future.
We publish the Integrated System Plan (ISP) every two years, following a collaborative stakeholder engagement process. The ISP is a roadmap for the energy transition in the NEM over at least the next 20 years, in line with government policies to reach a net zero economy by 2050. It outlines the lowest-cost pathway of essential generation, storage and transmission infrastructure to meet consumers’ forecast energy needs for secure, reliable and affordable energy, and to achieve net zero emissions targets. This information supports government and industry to plan and invest in infrastructure to meet current and future energy needs.
We provide independent technical insights to inform policy and market-led investment. Reports such as the Electricity Statement of Opportunities (ESOO) and the Gas Statement of Opportunities (GSOO) on both the east coast and west coast are important planning and
forecasting tools that support investors and governments to make informed decisions.Our planning functions are evolving to consider greater interdependencies between electricity and gas, and between electricity transmission and distribution. Following the Energy Ministers’ response to a review of the ISP and two recent rule changes, we have updated our ISP methodology to better integrate gas, improve demand-side modelling, assess actionability of transmission projects, and enhance modelling.
We work with governments, industry and market bodies to inform, deliver and embed market and system reforms. One of the major areas we are working on with government and industry is better integration of CER into market and system design in the NEM, through the
development of the national CER Roadmap to unlock CER at scale.In Western Australia, we supported the State Government’s Distributed Energy Resources (DER) Roadmap through Project Symphony, a completed pilot project, and continue to collaborate with industry on Project Jupiter. These initiatives support the accelerated integration of DER – including rooftop solar and batteries – so that households and communities can participate in Virtual Power Plants (VPPs) to support the grid and engage in energy markets.
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4. Support new investment
With the energy transition underway, Australia is faced with the task of overhauling how energy is generated, stored and transmitted across the country.
While AEMO continues to operate systems and markets and conduct energy planning, we are increasingly partnering with governments to support the delivery of new investment in energy infrastructure needed in the transformation of Australia’s energy system.
In support of government programs to bring forward new investment, new functions have been conferred on AEMO, such as our role in CIS tenders, and ASL’s continued role for the New South Wales Electricity Infrastructure Roadmap tenders to support new investment in generation, storage and firming infrastructure.