{"id":41705,"date":"2025-08-13T15:29:16","date_gmt":"2025-08-13T05:29:16","guid":{"rendered":"https:\/\/flowpower.com.au\/residential\/tips-and-insights\/high-price-events-explained-2\/"},"modified":"2025-12-16T14:36:15","modified_gmt":"2025-12-16T04:36:15","slug":"the-wholesale-energy-market-explained","status":"publish","type":"post","link":"https:\/\/flowpower.com.au\/residential\/tips-and-insights\/the-wholesale-energy-market-explained\/","title":{"rendered":"The wholesale energy market explained"},"content":{"rendered":"","protected":false},"excerpt":{"rendered":"","protected":false},"author":20,"featured_media":39909,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-41705","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy-knowledge"],"acf":{"page_builder":[{"acf_fc_layout":"blog_hero","title":"<h2><span class=\"TextRun SCXW177901876 BCX0\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW177901876 BCX0\">The wholesale energy market explained<\/span><span class=\"NormalTextRun SCXW177901876 BCX0\">: how it impacts your electricity bills<\/span><\/span><span class=\"EOP SCXW177901876 BCX0\" data-ccp-props=\"{}\">\u00a0<\/span><\/h2>","blurb":"Learn how the wholesale energy market works, how it affects electricity prices, and how you can save money with smarter energy habits.","read_length":"8 mins","background_colour":"dark-blue"},{"acf_fc_layout":"breadcrumbs","background_colour":""},{"acf_fc_layout":"blog_article","sections":[{"acf_fc_layout":"content","content":"<iframe title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/xFl7JGcvo-I?si=hXf9hBuxKvructq7\" width=\"640\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe>\r\n\r\n<span data-contrast=\"auto\">We all receive electricity bills for our homes, whether it\u2019s once a month, or maybe once a quarter, but how many of us stop to think about where our energy is actually coming from?<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">If the energy market feels like a mystery to you, you're not alone \u2013 and it\u2019s no surprise either. The energy industry is notorious for being complicated. It\u2019s full of jargon and the big fossil-fuel players have kept customers in the dark from the inner workings of the market.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">But times are changing, and more energy-savvy Aussies are keen to learn how the market works - and how it influences what they pay for electricity.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">That\u2019s why we\u2019ve asked Flow Power\u2019s energy experts to break down everything you need to know. A little extra knowledge can go a long way, helping you make smarter, greener energy choices, and even save money on your monthly bill.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n<h3><span class=\"TextRun SCXW237521825 BCX0\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW237521825 BCX0\">What is the wholesale electricity market?<\/span><\/span><span class=\"EOP SCXW237521825 BCX0\" data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\r\n<span data-contrast=\"auto\">The wholesale electricity market, known in Australia as the <strong>National Electricity Market (NEM)<\/strong>, is where all electricity is bought and sold in bulk before it reaches homes and businesses.\u00a0<\/span><span data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">The energy market connects and powers Queensland, New South Wales, Victoria, South Australia and Tasmania. Each state is considered its own region (except for ACT, which is counted as part of New South Wales) and each region will have its own electricity price. We'll explain that in more detail shortly.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">In the National Electricity Market, electricity generators, such as wind turbines, solar farms, gas plants or coal power stations, produce electricity and sell it to utilities and retail energy providers. These companies then deliver the power to consumers, like you.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">However, unlike other commodities like iron ore, coal or grain etc, electricity has been very difficult to store cheaply (although this is changing very quickly with batteries). This means electricity needs to be <\/span><span data-contrast=\"auto\">generated and consumed<\/span> <span data-contrast=\"auto\">(or stored in <\/span><span data-contrast=\"auto\">batteries)<\/span> <span data-contrast=\"auto\">in <\/span><span data-contrast=\"auto\">equal <\/span><span data-contrast=\"auto\">amounts<\/span> <span data-contrast=\"auto\">in real-time<\/span><span data-contrast=\"auto\">. That\u2019s why balancing supply and demand in the market is critical to keeping our shared electricity grid stable.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">Sometimes, the energy market is used interchangeably with \u201c<strong>the grid<\/strong>.\u201d Typically, the grid refers to the network of power lines, substations, and infrastructure that delivers electricity from generation sources, like wind farms, solar plants, or traditional power stations, to homes. It\u2019s how energy travels from where it\u2019s produced to where it\u2019s used.<\/span><span data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span>\r\n\r\n&nbsp;\r\n<div class=\"img__wrap\"><img class=\"aligncenter wp-image-39933 size-large\" title=\"Australian Power Lines\" src=\"https:\/\/flowpower.com.au\/residential\/wp-content\/uploads\/Australian-power-lines-1-1024x584.jpg\" alt=\"Australian Power Lines\" width=\"1024\" height=\"584\" \/><\/div>"},{"acf_fc_layout":"spacer"},{"acf_fc_layout":"content","content":"<h3><span class=\"TextRun SCXW226613744 BCX0\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW226613744 BCX0\">How does wholesale electricity pricing work?<\/span><\/span><span class=\"EOP SCXW226613744 BCX0\" data-ccp-props=\"{&quot;335559738&quot;:240,&quot;335559739&quot;:240}\">\u00a0<\/span><\/h3>\r\n<span data-contrast=\"auto\">Each region has its own electricity price, which is set every 5 minutes, every day throughout the year. <\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">To set the price, energy generators submit an offer to sell the electricity they produce to AEMO. AEMO estimates how much electricity will be needed for the next 5-minute interval and selects the cheapest combination of offers from generators necessary to make sure enough is being produced to satisfy expected demand. <\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">Renewable generators that don\u2019t require fuel, like solar farms or wind turbines, are at an advantage here. They are typically able to generate at<\/span><span data-contrast=\"auto\"> a much lower cost than costly coal or gas fuelled generators. As such, they generally offer it into the market at lower prices. When there is lots of wind and solar generation available, these offers can drive down the wholesale cost of electricity, as the fossil fuelled generators are undercut by the cheaper renewable generation. <\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">During daytime hours when solar energy is at its peak, the wholesale price will usually be low \u2013 or even negative. In comparison, wholesale prices are typically at their highest around 6pm, when the sun has set, and demand tends to be higher due to a greater proportion of the energy in the grid coming from expensive fossil fuels, like coal. Overnight, when electricity demand is lower and there is generally more wind generation, wholesale electricity prices will typically also fall. <\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n&nbsp;\r\n<div class=\"img__wrap\">\r\n\r\n<img class=\"aligncenter wp-image-37932 size-large\" title=\"Bomen Solar Farm 1\" src=\"https:\/\/flowpower.com.au\/residential\/wp-content\/uploads\/Bomen_Solar_Farm-1-1-1024x768.jpg\" alt=\"Solar Panels\" width=\"1024\" height=\"768\" \/>\r\n\r\n<\/div>"},{"acf_fc_layout":"spacer"},{"acf_fc_layout":"content","content":"<h3><span class=\"TextRun SCXW233317216 BCX0\" lang=\"EN-GB\" xml:lang=\"EN-GB\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW233317216 BCX0\">How <\/span><span class=\"NormalTextRun SCXW233317216 BCX0\">wholesale electricity prices affect your bills<\/span><\/span><span class=\"EOP SCXW233317216 BCX0\" data-ccp-props=\"{}\">\u00a0<\/span><\/h3>\r\n<span data-contrast=\"auto\">If you\u2019re on a standard electricity plan, wholesale price<\/span> <span data-contrast=\"auto\">fluctuations won\u2019t have much influence on your electricity bills. You\u2019ll be charged a set rate by your electricity provider, regardless of whether the real-time price they pay from the wholesale market is high or low. <\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">On a wholesale-based contract, the price you pay will be determined by the real-time cost of electricity on the market. This pricing can be structured in different ways, depending on your retailer:<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n<ul>\r\n \t<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Full wholesale market price exposure:<\/span><\/b><span data-contrast=\"auto\"> In some cases, retailers will pass through the wholesale price at cost and charge you retail margin, or a subscription fee, for their service.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/li>\r\n<\/ul>\r\n<ul>\r\n \t<li aria-setsize=\"-1\" data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" data-list-defn-props=\"{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;\uf0b7&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Partial wholesale market price exposure<\/span><\/b><b><span data-contrast=\"auto\">: <\/span><\/b><span data-contrast=\"auto\">Other retailers \u2013 like Flow Power - link you to wholesale electricity market pricing<\/span><span data-contrast=\"auto\">, but don\u2019t leave you fully exposed to extreme price fluctuations<\/span><span data-contrast=\"auto\">. Instead, you receive an <\/span><span data-contrast=\"none\">adjustment to your bill each month<\/span><span data-contrast=\"auto\">, based on your usage patterns compared to market prices, to incentivise smarter energy habits.\u00a0<\/span><\/li>\r\n<\/ul>\r\n&nbsp;\r\n\r\n&nbsp;\r\n\r\n[button text='Our Pricing' link='https:\/\/flowpower.com.au\/residential\/pricing\/our-pricing\/']"},{"acf_fc_layout":"pull_out","content":"<h6>Is a wholesale-based electricity contract right for my household?<\/h6>\r\n<span data-contrast=\"auto\">If you\u2019re considering the shift to a wholesale-linked electricity contract it\u2019s good to consider how much energy you\u2019re using, and when. This is because the greatest cost-savings from <\/span><span data-contrast=\"auto\">wholesale<\/span><span data-contrast=\"auto\">-<\/span><span data-contrast=\"auto\">based <\/span><span data-contrast=\"auto\">electricity <\/span><span data-contrast=\"auto\">contracts<\/span><span data-contrast=\"auto\"> typically come from being more flexible with when you use energy.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">This might sound complicated, but it\u2019s really as simple as shifting the use of energy-hungry appliances to different times during the day. Regularly shift heavy-use appliances to cheaper times, and avoid using them during short, high-price events. The combination of both keeps your wholesale-linked contract working in your favour.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">Take your dishwasher for example - instead of running it straight after dinner, when prices are typically high, you can delay the start time to 11am the following day. Or if you\u2019ve got an EV, avoid trickle charging overnight and instead power up when prices are low during daytime hours.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>"},{"acf_fc_layout":"spacer"},{"acf_fc_layout":"accordion","accordion":[{"title":"Do I need to be home during the day to benefit from a wholesale-based electricity contract? ","content":"<span data-contrast=\"auto\">Even if you\u2019re not home during the day, the use of timers and smart plugs can make using energy flexibly more accessible, whether it\u2019s scheduling to power up when prices are low or remotely powering down any non-essentials when prices peak.\u00a0<\/span><span data-contrast=\"auto\">\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">If you have limited energy flexibility, home battery storage could help your household avoid using high-price energy from the grid during evening peaks. Plus, if your household doesn\u2019t use the energy you\u2019ve stored, you could benefit from a variable feed-in tariff for exporting energy to the grid when demand is high, while helping reduce the need for coal and gas generation.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>"},{"title":"How can I track market prices to know when to use electricity? ","content":"<span data-contrast=\"auto\">To simplify tracking the electricity market\u2019s movements, we built the <\/span><a href=\"https:\/\/flowpower.com.au\/residential\/energy-monitoring-tools\/\"><span data-contrast=\"none\">Flow Power app<\/span><\/a><span data-contrast=\"auto\"> for customers. It connects you to your live usage data and gives you simple price insights for the week ahead, so you can plan your usage accordingly. The app is your pocket energy advisor, helping you know when to power down, or power ahead.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">Not a Flow Power customer, but curious to learn more about the electricity market? You can also track wholesale prices with <\/span><a href=\"https:\/\/aemo.com.au\/energy-systems\/electricity\/national-electricity-market-nem\/data-nem\/data-dashboard-nem\"><span data-contrast=\"none\">AEMO\u2019s NEM Data Dashboard<\/span><\/a><span data-contrast=\"auto\">. It\u2019ll give you more insight into the current fuel mix in the grid, telling you how renewable energy is in real-time, and show you live pricing for every state in the electricity market.<\/span>"},{"title":"Does a wholesale-based electricity product encourage sustainability? ","content":"<span data-contrast=\"auto\">Yes. By shifting your energy use to align with low prices on the wholesale electricity market, you\u2019re also aligning your electricity use to a time when renewable energy generation i<\/span><span data-contrast=\"auto\">s typically at its highest.<\/span><span data-ccp-props=\"{}\">\u00a0<\/span>\r\n\r\n<span data-contrast=\"auto\">Plus, the more usage we can shift to these cheaper, greener times means helps reduce demand for energy from fossil fuelled generators. <\/span><span data-ccp-props=\"{}\">\u00a0<\/span>"}]}],"background_colour":"grey"},{"acf_fc_layout":"spacer","large":false,"background_colour":""},{"acf_fc_layout":"faq_cta","heading":"<h2>Have more questions? <em>we\u2019re here to help<\/em><\/h2>","content":"<h5>Drop us your details and one of our friendly agents will be in touch.<\/h5>\r\n[gravityform id=\"12\" title=\"false\" ajax=\"true\"]","buttons":[{"link":{"title":"See our FAQs","url":"https:\/\/flowpower.com.au\/residential\/frequently-asked-questions\/","target":"_blank"}},{"link":{"title":"Contact Us","url":"https:\/\/flowpower.com.au\/residential\/contact-us\/","target":"_blank"}}],"show_arrow":false,"centered":false,"background_colour":"mint"}],"summary":"Learn how the wholesale energy market works, how it affects electricity prices, and how you can save money with smarter energy habits.","show_ci_banner":false,"hide_headermenu":false},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.7 - 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