Marginal Loss Factors determine how much revenue generators receive for each MWh produced, accounting for electrical losses in the transmission and distribution network. Published annually by AEMO for each NEM financial year. Data shown covers the five NEM regions — Western Australia operates a separate loss factor regime.
Reference node region — transmission MLFs are relative to the Sydney West 330kV node. Most generators have MLFs close to 1.0.
Concentrated generation in the Latrobe Valley creates transmission losses to Melbourne load centres. Wind farms in western Victoria often have lower MLFs.
Large solar capacity in central and north Queensland faces transmission losses to southern load centres. MLFs vary widely by connection point.
Remote from NEM demand centres — wind and solar farms in northern SA can have significantly lower MLFs due to network congestion.
Island state connected via Basslink — hydro generators experience relatively stable MLFs but are affected by interconnector flow direction.
In the National Electricity Market, electricity generated at one location must travel through the transmission and distribution network to reach consumers. Energy is lost as heat during this transmission — these are known as electrical losses. Marginal Loss Factors quantify these losses for each generator and load connection point.
An MLF of 0.95 means the generator effectively receives 95% of the regional reference price for each MWh it produces. A generator close to major load centres (like Sydney or Melbourne) typically has an MLF near 1.0, while remote generators — particularly solar and wind farms in regional areas — can have MLFs well below 0.90, significantly reducing their revenue per MWh.
AEMO publishes MLFs annually, with values applying from 1 July each year. Transmission MLFs are calculated based on the marginal impact of an additional MW of generation at each connection point. Distribution loss factors (DLFs) account for losses in the local distribution network and are published by distribution network service providers.
For generators and renewable developers, MLFs directly affect project economics. A solar farm with an MLF of 0.88 effectively sells at an 12% discount to the regional reference price. Year-on-year MLF changes can shift project IRR by several percentage points — making MLF risk a critical factor in investment decisions and PPA negotiations.
For commercial energy buyers, understanding MLFs helps explain regional price differentials and assess the true cost of contracting with generators at different connection points. MLFs flow through to PPA settlement calculationsand can create basis risk between the contracted generator's connection point and the regional reference node.
For trading desks, MLF changes published each April signal shifts in network congestion patterns and can affect forward pricing, particularly for contracts referenced to specific generators. See our live electricity prices and price forecasts for current market context.
Search and filter MLFs by region, generator DUID, and financial year. Compare year-on-year MLF trends for any NEM generator. Available on Professional and Enterprise plans.
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