The Australian Energy Regulator (AER) today published a report into high energy prices exceeding $5,000 per megawatt hour (MWh), in the National Electricity Market (NEM).
The report covers seven 30-minute prices in Queensland and four in NSW, between 20 April and 15 May. These price spikes were not key drivers of the more recent energy supply crisis, which was largely driven by high underlying prices.
The main drivers of high prices examined in this report included:
- A planned outage of the network equipment at Lismore, which limited Queensland’s access to cheaper generation from NSW.
- Planned and unplanned generator outages, which led to reduced available low-priced capacity.
- An unplanned 330 kV line outage which prevented cheap generation from southern NSW and Victoria reaching the Sydney load centre.
In addition, rebidding by participants contributed to the 20 April, 28 April and 3 May high price events.
The AER is required to report into significant price outcomes in the NEM.
A high price may occur due to a variety of factors, including outages that adversely affect supply-demand conditions in the wholesale market.
The AER’s role in monitoring wholesale energy markets and reporting on high price events helps to enhance market transparency and compliance.
Our analysis provides a foundation to detect non-compliance, market irregularities, inefficiencies and consumer harm. We draw on this work to advise stakeholders and market bodies on wholesale market issues.
The AER is currently consulting on a Guideline for how we will report into significant price outcomes in the future. Interested parties are encouraged to provide written submissions to email@example.com by Tuesday, 30 August 2022.