The Wholesale Electricity Market (WEM) 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 WEM 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.
The operation of the WEM is governed by the Electricity System and Market Rules, which cover the trading and dispatch of energy, the Reserve Capacity Mechanism, and settlement.
The operator of the WEM is the Australian Energy Market Operator (AEMO). The ESM Market Rules also cover AEMO's roles and functions.
The ERA’s role in the WEM includes:
- monitoring market participant behaviour
- determining key market parameters, such as the energy market price caps
- undertaking reviews required by the Electricity System and Market Rules
- approving AEMO’s funding
- compliance and enforcement.
The Electricity System and Market Rules replaced the previously named Wholesale Electricity Market Rules on 4 June 2025.
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