A watt is a measurement of electricity usage. For example, a 100 watt light bulb is rated to consume 100 watts of power when turned on.

If the light bulb were left on for four hours it would consume a total of 400 watt-hours (Wh) of electricity. Watts, therefore, measure instantaneous power while watt-hours measure the total amount of energy consumed over a period of time.

A MW is a term commonly used in the energy industry, and is one million watts.

1000kWh = 1 mWh
160,000kWh = 160mWh

The supply of electricity begins with generation in power stations.

Electricity generators are usually located near fuel sources such as coalmines, natural gas pipelines and hydro-electric water reservoirs.

Below is an example of one of Hydro Tasmania's power stations, creating energy from water. High pressure water is sent through turbines to generate electricity.

Below is a video about one of Hydro Tasmania's hydro-electric developments, Poatina, and its recent upgrade.

Most electricity customers are located a long distance from these generators in cities, towns and regional communities.

The supply chain therefore requires networks or distributors to transport power from generators to customers.

Distribution companies move electricity from points along the transmission line to customers in cities, towns and regional communities.

A Distributor is responsible for managing the poles and wires that transport the electricity to your electricity meter. Your electricity meter is a device which records how much electricity you consume.

There are different types of meters depending on how much electricity you consume i.e. a large factory will have a different meter than a small apartment.

The Retailer is responsible for issuing bills to the customer. As discussed previously, this includes pass through charges such as distribution costs as well as energy consumption + retail profit margin.

The Retailer is responsible for all customer facing activities including: billing requests, enquiries and complaints, moving address, change to supply details i.e. installing or removing a meter, and connections and disconnections.

Since Full Retail Contestability, a customer now has the choice to choose which retailer to connect their electricity.

There are different fuels which can be used to generate electricity which include non renewable sources such as gas and coal. Non renewable means that once the fuel source is used up there will be no more available.

There are also renewable sources such as wind and hydro (water) which are known as green energy. Renewable means that once the fuel source is used up more can be produced.

The most commonly utilised resources in Australia are black and brown coal, as well as gas. This is because they are cheap fuel sources that are easily accessible.

Nonetheless, Hydro Tasmania are leading the way in renewable energy generation, being Australia's largest generator of renewable energy. Below is one of Hydro Tasmania's hydro-electric power stations, Cluny.

When electricity is produced, it is stored in what is known as the ‘electricity pool’, although the pool is not a physical location.

Electricity is an ideal commodity to be traded using pool arrangements because electricity cannot be stored for future use, and because one unit of electricity is indistinguishable from another it is impossible to tell which generator produced which electricity.

Wholesale trading in electricity is conducted through a spot market where supply and demand are instantaneously matched in real time through a centrally coordinated dispatch process.
 

Momentum Energy are a participant within the National Electricity Market (NEM). Other participants are transmission companies, distribution companies and the wholesale market.

There are also other important market participants such as:

• AEMO
• Ombudsman schemes for each state
• Essential Services Commission of Victoria and South Australia
• Australian Energy Regulator

There are different Ombudsman schemes in each state: