Australian Energy Market Operator

What AEMO does day to day

Every five minutes, AEMO runs a dispatch algorithm that accepts bids from generators and dispatchable loads, calculates the least-cost combination to meet forecast demand, and sets a spot price. This process runs continuously, 24 hours a day.

Beyond dispatch, AEMO is responsible for:

System security - maintaining frequency at 50 Hz, managing transmission constraints, and coordinating responses to network events (generator trips, transmission line faults).

Market oversight - administering the rules of the National Electricity Market under the National Electricity Rules, monitoring for manipulation, and operating the settlement and metering systems.

Long-term planning - publishing the Integrated System Plan (ISP), which models the optimal transmission and generation mix for the NEM over the next 20+ years. The ISP increasingly identifies the role of rooftop solar, batteries, and demand flexibility in the future grid alongside large-scale generation and new transmission.

Relevance for households

Most homeowners have no direct relationship with AEMO - they interact with a retailer, who interacts with the market. But AEMO’s policies increasingly affect what households with solar and batteries can do:

DER integration - AEMO manages the technical frameworks for distributed energy resources (DER). The high penetration of rooftop solar in states like South Australia has created grid stability challenges that AEMO and network operators have responded to with export limits, minimum import settings, and inverter technical standards (AS/NZS 4777.2).

VPP coordination - AEMO has developed frameworks for aggregated home batteries to participate in the wholesale market and FCAS services, either as scheduled resources or through the emerging DER aggregator registration category.

Demand response - AEMO operates the Emergency Demand Response mechanism and is developing longer-term frameworks for residential demand flexibility to participate in market services.

The AEMO website publishes real-time market data including current spot prices, generation mix, and rooftop solar output across the NEM - publicly accessible and worth looking at on a hot summer afternoon to understand what’s actually happening on the grid.