The National Electricity Market (usually called the NEM) is the electricity system that connects every city and many rural areas on Australia’s east coast, and stretches from Cairns to Sydney, Melbourne, Adelaide and Hobart. Western Australia and Northern Territory are not part of the NEM. The NEM includes the physical system, the financial systems and the regulatory systems that govern electricity supply across the east coast of Australia.

The NEM is made up of the poles and wires connecting everything together and a wholesale electricity market managed by the Australian Energy Market Operator (AEMO). AEMO ensures the electricity produced matches what is consumed, and the price paid in every state. AEMO also manages the flows of electricity between states. A range of network businesses own and operate the poles and wires that connect the generators to each electricity user. The larger long distance electricity flows occur on the transmission system, which is at high voltage, and is operated by the Transmission Network Service Providers (TNSPs). The local electricity systems are known as distribution networks and are operated by the Distribution Network System Operators (DNSPs).

https://aemo.com.au/learn/energy-explained/energy-101/how-the-national-electricity-market-works