AER reports on significant price variations in gas markets

The Australian Energy Regulator (AER) has today published report into the events of July 2021, when there were significant price variations in the Adelaide and Sydney Short Term Trading Markets (STTMs).

There were nine occasions where deviations, between the forecast provisional price two days before the gas day (D-2) and the last price schedule (D-1), exceeded $7/GJ.

This impacted the Adelaide STTM on one occasion, with the remaining eight threshold breaches occurring in the Sydney STTM.

The AER investigates significant price variations because such variations may indicate that the gas markets are operating in an inefficient way. The efficient functioning of gas markets allows consumers and industry to be supplied with affordable and reliable gas. In general, market outcomes are optimised when participants have access to information as early as possible.

In July, price volatility increased as a number of factors contributed to tight supply-demand conditions, with the largest price impacts observed in southern gas markets.

In particular there was price volatility between the forecast price and the last price schedules:

  • Tight supply-demand conditions drove volatility in forecast pricing, with small changes in demand able to drive significant price swings in the southern markets.
  • High coincident demand across southern regions, and relatively high gas-powered generation requirements influenced bidding behaviour across participants’ market portfolios.
  • Significant changes in gas supply offer quantities and prices were a driver of deviations between forecast prices and the last price schedule in the STTMs.
  • The majority of deviations supressed the last price schedule prices below forecast provisional levels.


The AER reports on significant price variations in short term trading markets in Adelaide, Sydney and Brisbane, and the Declared Wholesale Gas Market in Victoria.

This Significant Price Variation (SPV) report is published by the AER in accordance with the requirements under Rule 498(3)(b) of Part 20 of the National Gas Rules (Gas Rules).

The following reporting triggers apply to each hub for any gas day: 

  1. When there is a variation of greater than $7/GJ between the D-2 price and ex ante price 
  2. When there is a variation of greater than $7/GJ between the ex ante and the ex post price 
  3. When an ex ante price is greater than three times the 30 day rolling average price and greater than $15/GJ 
  4. When an ex post price is greater than three times the 30 day rolling average price and greater than $15/GJ 
  5. When daily market operator service payments exceed $250 000.
Issued date: 
17 November 2021
AER reference: 
AC 177/21
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