How Marginal Loss Factors (MLFs) impact renewable energy and BESS projects in the Australian NEM

What are MLFs?

MLFs account for energy losses from a generation point to the regional reference node, directly impacting market participation and revenue.

MLFs are set by AEMO each year reflecting changing network conditions and generation patterns, and the new systems being connected to the network (loads, generators, and storage systems). MLFs will impact a system’s participation in the wholesale market in relation to both dispatch and settlement. The revenue difference between a site with a MLF of 0.81 (bad) and of 1.09 (good) can be up to 30% per year... And these factors can change every year!

Examining the data

We analysed the MLFs published by the AEMO from 2021 until 2025 and uncovered some interesting patterns.

Weather-dependent generators tend to have the lowest average MLFs, while generators with rotating turbines experience the highest average MLF.

MLFs for solar farms are the most volatile in Victoria, followed by NSW, meaning that they've had the greatest jumps from one year to the other. Fossil fuel on the other hand, has had the least amount of fluctuation in their MLFs.

Queensland and South Australia have exhibited the least MLF fluctuations across years and asset types, whereas New South Wales has the highest variability in MLFs, creating higher unpredictability patterns in revenue forecasting for the state.

How does Gridcog help with MLFs?

Gridcog supports multi-scenario analysis enabling energy analysts to consider the impact of changing MLFs over time on project revenues.

‍Reach out to find out more.

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