1 00:00:03,920 --> 00:00:07,320 Speaker 1: Welcome to Ask Fear and Greed, where we answer questions 2 00:00:07,360 --> 00:00:10,400 Speaker 1: sent in by listeners. I'm Julian King. There's plenty of 3 00:00:10,440 --> 00:00:13,760 Speaker 1: ways to ask a question. You can do it by LinkedIn, Instagram, 4 00:00:13,880 --> 00:00:17,160 Speaker 1: ex TikTok and Facebook and drop us a question. Today's 5 00:00:17,200 --> 00:00:21,320 Speaker 1: question is from Sally Sean and she asks, I'd love 6 00:00:21,440 --> 00:00:25,880 Speaker 1: to hear a simple explanation of how the NM works. 7 00:00:26,560 --> 00:00:29,159 Speaker 1: That's a challenge. That's the National Electricity Market. What's the 8 00:00:29,160 --> 00:00:32,760 Speaker 1: criteria to participate? How does the pricing work? Which state 9 00:00:32,800 --> 00:00:35,239 Speaker 1: has the lowest prices? Sean over to. 10 00:00:35,240 --> 00:00:38,960 Speaker 2: You, Ah, Julian, not an easy question. I have spent 11 00:00:39,440 --> 00:00:42,760 Speaker 2: many an hour. Don't work at the National Electricity Market. 12 00:00:44,040 --> 00:00:46,880 Speaker 2: Let's start the basics. It is exactly what it says 13 00:00:46,880 --> 00:00:49,880 Speaker 2: it is. It's a market for the supply and distribution 14 00:00:50,080 --> 00:00:52,920 Speaker 2: of electricity. In this case, it's across all the states 15 00:00:52,920 --> 00:00:56,200 Speaker 2: and territories except for Western Australia and Northern Territory they 16 00:00:56,200 --> 00:00:58,080 Speaker 2: have their own, but the rest of the East Coast 17 00:00:58,360 --> 00:01:02,720 Speaker 2: over to South Australia is the National Electricity Market. The 18 00:01:02,800 --> 00:01:06,560 Speaker 2: market also has the transmission lines and cables, about forty 19 00:01:06,640 --> 00:01:10,760 Speaker 2: thousand kilometers of those, so that's what the neem is. 20 00:01:11,600 --> 00:01:14,920 Speaker 2: It actually supplies about two hundred terawa hours of electricity 21 00:01:15,360 --> 00:01:19,160 Speaker 2: to businesses and households each year. That's a lot in 22 00:01:19,240 --> 00:01:24,000 Speaker 2: terms of what supplies most power. Coal far and away 23 00:01:24,240 --> 00:01:26,240 Speaker 2: is the leader. It's about fifty percent of the market, 24 00:01:26,760 --> 00:01:31,560 Speaker 2: followed by wind, rooftop solar, hydro and grid solar all 25 00:01:31,600 --> 00:01:35,240 Speaker 2: in all supplies around nine million customers. So that's what 26 00:01:35,360 --> 00:01:39,520 Speaker 2: it is. Wholesale generation. So you have the generators. They 27 00:01:39,560 --> 00:01:43,600 Speaker 2: transport the power they're generating via high voltage transmission lines 28 00:01:43,720 --> 00:01:47,880 Speaker 2: from generators to large either to large industrial energy users 29 00:01:48,320 --> 00:01:51,960 Speaker 2: might be still works for example, or to local electricity 30 00:01:52,200 --> 00:01:55,920 Speaker 2: distributors in each region, so it might be your power company, 31 00:01:55,960 --> 00:01:59,120 Speaker 2: for example. Your power company then delivers it to homes 32 00:01:59,120 --> 00:02:02,800 Speaker 2: and businesses. From the market, the neem it either goes 33 00:02:02,840 --> 00:02:07,600 Speaker 2: to big industrial users or to electricity distributors, and that's 34 00:02:07,600 --> 00:02:10,560 Speaker 2: where it ends up with us. The transport of electricity 35 00:02:10,600 --> 00:02:14,000 Speaker 2: from generators to consumers is facilitated through what they call 36 00:02:14,040 --> 00:02:16,520 Speaker 2: a spot market or pool market, and this comes this 37 00:02:16,600 --> 00:02:20,440 Speaker 2: where pricing comes into it. So all the output from 38 00:02:20,440 --> 00:02:22,960 Speaker 2: all those generators out there, it might be coal, it 39 00:02:23,040 --> 00:02:27,200 Speaker 2: might be hydro, it might be wind. It's all put together. 40 00:02:27,200 --> 00:02:30,840 Speaker 2: It's all aggregated and schedule that five minute intervals to 41 00:02:30,880 --> 00:02:35,360 Speaker 2: meet demand. Really important. This every five minutes, it pings 42 00:02:35,400 --> 00:02:39,280 Speaker 2: how much powers needed and the generators provide that power, 43 00:02:39,520 --> 00:02:43,440 Speaker 2: and that also sets pricing, so you actually have pricing 44 00:02:43,720 --> 00:02:46,480 Speaker 2: in real time. Now when the question is about which 45 00:02:46,480 --> 00:02:50,280 Speaker 2: states are more expensive, which states are cheaper, it very 46 00:02:50,360 --> 00:02:55,280 Speaker 2: much depends on the supply and demand from those states. 47 00:02:56,360 --> 00:02:59,760 Speaker 2: The market uses really sophisticated systems to send signals to 48 00:02:59,760 --> 00:03:04,040 Speaker 2: generators instructing them how much energy to produce every five minutes. 49 00:03:04,080 --> 00:03:08,639 Speaker 2: Productions matched to requirements to demand, and off it goes, 50 00:03:08,720 --> 00:03:12,480 Speaker 2: and that's where you sort of calculate the energy price. Now, 51 00:03:12,600 --> 00:03:17,280 Speaker 2: the national electricity market infrastructure comprises both state and private 52 00:03:17,320 --> 00:03:21,880 Speaker 2: assets managed by industry participants. It is enormous, Gulie. I 53 00:03:21,919 --> 00:03:24,359 Speaker 2: don't know that I've quite answered the question. I think 54 00:03:24,440 --> 00:03:27,880 Speaker 2: I have. So it's basically all these it's a marketplace 55 00:03:28,480 --> 00:03:32,200 Speaker 2: producing huge amounts of power. Two big users, one we consumers, 56 00:03:32,240 --> 00:03:35,440 Speaker 2: the other other industrial guys. It's priced every five minutes, 57 00:03:35,440 --> 00:03:37,120 Speaker 2: and there's sort of things going out to the generator 58 00:03:37,160 --> 00:03:39,640 Speaker 2: saying we need power, and that's going to this person 59 00:03:39,680 --> 00:03:42,760 Speaker 2: over there. So it's in real time. And that's how 60 00:03:42,800 --> 00:03:43,600 Speaker 2: the system works. 61 00:03:44,040 --> 00:03:49,480 Speaker 1: How I go beautifully encapsulated shored simply grab something so 62 00:03:49,600 --> 00:03:52,840 Speaker 1: complex and put it in easy to couch terms. 63 00:03:53,560 --> 00:03:55,440 Speaker 2: Yes. The other thing is, you know when we talk 64 00:03:55,440 --> 00:03:58,080 Speaker 2: about wholesale capping in this which is what the government 65 00:03:58,120 --> 00:04:00,240 Speaker 2: stepped in and said, you can't charge more and a 66 00:04:00,240 --> 00:04:04,640 Speaker 2: certain amount for the Internet when you're distributing energy from 67 00:04:04,640 --> 00:04:06,840 Speaker 2: the national electricity market. And the idea is to keep 68 00:04:06,880 --> 00:04:09,360 Speaker 2: energy prices down well and good for you consumer is 69 00:04:09,360 --> 00:04:12,440 Speaker 2: the only problem is that then you get the generators 70 00:04:12,480 --> 00:04:15,440 Speaker 2: not being so fast to provide power into it because 71 00:04:15,440 --> 00:04:17,720 Speaker 2: they're cakeped at what price they can get. But anyway, 72 00:04:17,760 --> 00:04:18,799 Speaker 2: that's a whole another topic. 73 00:04:19,440 --> 00:04:21,560 Speaker 1: Thank you, Sean. That's ask if you're and greed. If 74 00:04:21,600 --> 00:04:24,160 Speaker 1: you have a question, get in touch via LinkedIn, Instagram, 75 00:04:24,200 --> 00:04:26,680 Speaker 1: ex TikTok, and Facebook and we'd love to hear from you. 76 00:04:26,839 --> 00:04:27,680 Speaker 1: I'm Julian King.