AER releases report on high price events in Sydney and Adelaide wholesale gas markets

The Australian Energy Regulator’s (AER) role in monitoring wholesale energy markets and reporting on price events helps to enhance market transparency and build a culture of compliance. As part of this role, we report on events that result in the price of Market Operator Services (MOS) in Short Term Trading Markets (STTMs) exceeding $250 000.

  • On 7 November 2016, MOS payments for the Sydney STTM totalled $329 793.

This was the largest Sydney MOS payment since January 2016.

  • On 21 November 2016, MOS payments for the Adelaide STTM totalled $367 334.

This was a record high MOS payment for the Adelaide STTM.

MOS, also known as balancing gas, is required to manage the everyday mismatch between the total amount of gas forecast by a pipeline’s shippers (typically gas retailers) and the amount of gas actually delivered.

There can be a broad range of reasons for this mismatch. The Sydney incident was largely due to business’s over forecasting demand. Over forecasting is an ongoing area of investigation for the AER. The Adelaide incident was primarily because of physical network issues. 

More in-depth analysis can be found in the AER’s SPV reports of 31 March 2017.

Our analysis provides a foundation to detect non-compliance, market irregularities, inefficiencies and consumer harm. We draw on this work to advise the COAG Energy Council, other stakeholders and market bodies on wholesale market issues, working towards better long-term outcomes for consumers.

Sector: 
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Issued date: 
31 March 2017
AER reference: 
AC 32/17