Distribution

Electricity is provided to consumers via the distribution infrastructure. Electricity is distributed through overhead power lines and also via underground cables.

The total length of Victorias electricity distribution lines is around 200,000 km. The transmission networks feed high voltage electricity into the lower voltage.

There are five electricity distribution areas in Victoria Three areas encompass Melbourne and the inner suburbs, and two cover the outer suburban areas and regional Victoria. The price and quality of electricity distribution services are regulated by the Australian Energy Regulator (AER).

Maps of the electricity distribution areas, and contact details for the distributors are available from Essential Services Commission

Electricity Generation and Consumption

Victorias 6,000 kilometre high-voltage electricity transmission system is owned and maintained by AusNet Services. However, the transmission system is subject to the operational control of the Australian Energy Market Operator (AEMO), a state-owned market and system operator.

AEMO's role is to ensure the integrity of the system and to operate the National Electricity Market (NEM). This is a wholesale spot market covering the south-east of Australia, so that electricity is efficiently and reliably generated and transported to the point of consumption.

Transformers reduce the transmission voltage to allow it to be transmitted via lower voltage distribution networks. The majority of electricity transported in Victoria is from the brown coal generators in the Latrobe Valley to Melbourne, the largest demand centre in the state.

Victoria's electricity transmission network is interconnected with South Australia, New South Wales, Tasmania and indirectly with Queensland. This allows the transportation of electricity from the states when electricity demand in Victoria is relatively high, or from Victoria when demand is relatively low.

The AEMO is responsible for planning for the Victorian electricity transmission system to ensure existing and expected demands are met. This excludes the transmission connection facilities that connect the distribution networks and the generators to the high voltage network. Proposals for the development of transmission connection facilities are typically undertaken by distribution companies and generators.

Electricity Transmission

The majority of Victoria's electricity requirements are supplied by brown coal generators in the Latrobe Valley. At current production rates, brown coal reserves are adequate to satisfy Victoria's demand for several hundred years.

Other electricity supply comes from gas-fired generators and from renewable energy sources including hydro-electric, wind power, solar and biomass. Further information on Victoria's renewable energy resources can be obtained from the Sustainability Victoria website

Electricity can also be supplied to meet Victorian demand via transmission interconnectors with other States. In addition, demand can be reduced through agreements the State has with Alcoa and through privately negotiated contracts between energy retailers and large (mostly industrial) customers.

Although rare, power restrictions can be used to ensure continuity of supply in situations of supply emergencies.

Retail

In the 1990s energy industry reforms led to the of privatisation of the government-owned monopoly. This introduced competition into Victoria's energy production and retailing market.

Victoria's energy retailers provide customers with their energy services. The retailers deal with energy producers, transmission and distribution companies, and provide a "bundled" service to their end consumers. There are approximately 2.2 million residential and small business customers that use electricity and around 1.5 million that use gas in Victoria.

Since the introduction of Full Retail Contestability in electricity and gas in 2002, all Victorian energy consumers have been able to choose their own retailer.