The Australian Energy Regulator (AER) has published a report into a high energy price exceeding $5,000 per megawatt hour (MWh), in the National Electricity Market (NEM) on 11 November 2021.
On that day, the 30-minute price in Queensland reached $7,149/MWh for the 2 pm 30-minute period.
The main drivers included limited access to low-priced capacity due to generator outages and reduced generator availability. There was also rebidding of around 700 MW of capacity from low to high prices that contributed to a price above $5,000/MWh.
In addition, there were trade-offs between the energy and ancillary service markets with ancillary service prices high at the time. And, there was also a sudden increase in grid demand due to a reduction in rooftop solar generation.
At the time, 21% of capacity in Queensland was offered above $5,000/MWh.
The AER is required to publish a report whenever the electricity 30-minute price exceeds $5,000/MWh and when prices for a market ancillary service over a period significantly exceed the relevant 30-minute price for energy and exceed $5,000/MW for a number of 30-minute periods.
There can be many reasons a high price occurs, 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.