Interconnectors in the National Electricity Market (NEM)
Interconnectors are high-capacity transmission lines that enable electricity to flow between the five NEM regions: South Australia, Victoria, Tasmania, New South Wales, and Queensland. They play a vital role in balancing supply and demand, ensuring reliability, and optimizing electricity costs across the market.Interconnectors are critical infrastructure within the NEM, enabling efficient energy sharing across regions, improving price stability, and enhancing system reliability. As demand for renewable energy grows, ongoing upgrades and new interconnectors will play an even more significant role in shaping Australia’s energy landscape.
Energy Transfers: Interconnectors allow electricity to move from regions with surplus (and lower spot prices) to regions with higher demand (and higher spot prices). This often equalizes prices between regions, improving market efficiency.
Capacity and Constraints: Each interconnector has a nominal capacity defining its optimal power transfer capability under normal conditions. However, actual capacity can vary based on network conditions, thermal limits, or stability requirements.
Reducing Local Reliance: By importing electricity, interconnectors can reduce the need for additional local generation capacity, acting as a substitute for regional generation investments.