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Wholesale Electricity Market

The Wholesale Electricity Market in Western Australia, located in the South West Interconnected System, commenced in September 2006. It consists of two key components: a capacity market where electricity providers are paid for the capacity they make available, and a wholesale market where market participants interact to supply and purchase electricity.

The Market allows for competition between generators and retailers by ensuring mechanisms are in place that aim to ensure the most efficient and lowest-cost generators are used to supply electricity.

Customers benefit from having a mechanism that ensures they can use electricity when they need it, and the electricity is delivered at the lowest practicable cost.

The operation of the Market is governed by the Wholesale Electricity Market Rules, which cover the trading and dispatch of energy, the Reserve Capacity Mechanism, and settlement.

The operator of the Market is the Australian Energy Market Operator (AEMO). The Market Rules also cover the roles and functions of AEMO.

The ERA’s role in the Wholesale Electricity Market includes:

  • monitoring market participant behaviour
  • determining key market parameters, such as the energy market price caps
  • undertaking reviews required by the Wholesale Electricity Market Rules
  • approving AEMO’s funding
  • providing a triennial report to the Minister for Energy on the effectiveness of the Market
  • compliance and enforcement.
Page last updated: 16 Jan 2023