Australia's electricity generation sector is evolving from its historic reliance on coal and, to a lesser extent, hydroelectricity to a more diverse mix using coal, gas and renewable energy sources.

There are more than 300 registered generators in the National Electricity Market (NEM). Generators in the NEM produced around 200 terawatt hours of electricity in 2012-13, which was traded on the NEM for around $12 billion.

Most electricity in the NEM is generated from coal-fired power stations, which operate continuously to meet base load demand from households and businesses.

While gas is a more expensive fuel than coal, open cycle and combined cycle gas turbines are competitive at times of intermediate and peak demand. Gas-fired generation has become increasingly important in the last decade.

The leading renewable technologies are hydroelectricity and wind. Together they supply around ten per cent of the NEM’s output.

Distributed generation (also referred to as embedded generation) is where power is generated on site at the point of consumption. Some commercial customers are now seeking to generate their own power from sources such as gas, solar, wind or biomass. An increasing number of residential customers are also using rooftop solar photovoltaic units.

For up-to-date information on the generation mix in the NEM, go to the AER’s State of the Energy Market reports.