Dispatch compliance is central to the operation of the National Electricity Market (NEM). Every five minutes, the Australian Energy Market Operator (AEMO) issues dispatch instructions to generators. These instructions are intended to balance supply and demand while maintaining system security.

When an asset’s actual output deviates beyond AEMO’s conformance thresholds, AEMO declares it non-conforming. A unit-specific constraint is then applied, fixing the asset at its actual output and requiring the market to rebalance around the deviation. AEMO publishes these events as market notices, forming part of the operational record of the system.

As the generation mix changes, non-conformance is becoming more frequent, but the NEM imposes no automatic penalty on the responsible generators. The only financial mechanism linked to deviation is Frequency Performance Payments (FPP), which rewards or penalises units based on whether their output helps or harms frequency restoration. FPP does not assess whether a unit followed its dispatch target, meaning energy non-conformance itself carries no dedicated in-market consequence.

This article examines which technologies account for most non-conformance events, how behaviour changes over an asset’s life, and how the costs created by these deviations are allocated across the market.

Contact the author at marcus@modoenergy.com

Executive summary

• Dispatch non-conformance is becoming more common as the generation mix changes, driven by ageing coal units and commissioning-phase behaviour in new assets.
  
• Coal accounts for the largest share of notices overall, but batteries record the highest number in the most recent year as new capacity enters the market.
  
• Non-conformance is most frequent in an asset’s first year of operation, with event rates falling sharply after commissioning.
  
• Most events occur at low prices and have limited financial impact, but deviations during extreme price intervals can be costly.
  
• Energy dispatch non-conformance carries no automatic in-market penalty. The market corrects the imbalance through FCAS, while enforcement under the National Electricity Rules remains rare.
  
  

Coal drives most non-conformance events, with batteries rising sharply

Coal accounted for the largest share of non-conformance events between 2020 and 2024, responsible for more than all other technologies combined. In 2025, however, batteries recorded the highest number of notices, a consequence of . Batteries often miss their dispatch targets during testing as operators calibrate control systems, tune bidding algorithms, and verify response times against AEMO's dispatch signals. These deviations typically resolve once commissioning is complete.