“Happy Birthday” to the NEM (13th December 1998 – 12th December 2008)

This is just a short note to reflect on the fact that the NEM will be 10 years old tomorrow.

All together now…

“Happy Birthday to you, …”

The following chart shows how electricity demand across the NEM has grown (peak and average) since the start of the NEM.

We’ve calculated averages (rather than totals over the calendar year) as we’re not finished with December 2008 yet

Further analysis through NEM-ReviewTM reveals that the demand across the mainland regions of the NEM has grown as follows:

Total Growth Ave Growth p.a. Overall % Growth
Growth in Average Demand
(across the Mainland)
4,082MW 454MW 22%
Growth in Peak Demand
(across the Mainland)
6,987MW 776MW 27%

As has been noted in many other forums, peak demand is growing at a faster rate than average demand. This is illustrated in the table above.

(Over the three-year period that Tasmania has been a part of the NEM, its demand has not changed significantly)

Please note the clarification about the measurement of demand from the glossary on the NEM-Review portal.

What will be the story of the NEM another 10 years from now?

There are certainly plenty of challenges to work through over that time horizon, including:

  1. emissions trading,
  2. expanded MRET,
  3. aging generation, transmission & distribution assets,
  4. even concerns voiced in the press today (such as in the Australian Financial Review) about the AER’s draft ruling about the reduction in WACC allowed for network businesses.

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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