The Australian Energy Regulator (AER) monitors and reports on wholesale electricity markets. As part of this role, we report on events that result in wholesale electricity spot prices exceeding $5000 per megawatt hour (MWh).
Most end-customers are not directly exposed to wholesale electricity prices. Energy retailers are the main purchasers in the wholesale electricity market. Retailers bundle electricity with network services for sale to their residential, commercial and industrial customers. Generators and retailers can manage their exposure to price variations in the wholesale market by entering hedge contracts that lock in firm prices for the electricity they intend to produce or buy.
On Wednesday 8 February the spot price in South Australia exceeded $5000/MWh on five occasions, reaching $11 141/MWh at 5:30pm, $13 160/MWh at 6:00pm, $13 440/MWh at 6:30pm, $9387/MWh at 7:00pm, and $13 400/MWh at 7:30pm.
On Thursday 9 February, the spot price in New South Wales and South Australia exceeded the $5000/MWh reporting threshold on a further four occasions as the extreme temperatures continued across the country. Spot prices in South Australia reached $6755/MWh at 5pm, $8957/MWh at 5.30pm and $9509/MWh at 6.30pm. In NSW the spot price reached $7822/MWh at 5pm.
We expect to publish the report into these high prices within 40 business days, by 10 April 2017, on the AER’s website.
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In addition to reporting on these high price events, the AER will shortly be publishing reports on the following previous price events in the energy and ancillary service markets:
|Market||Event date||Region||Expected publication date*|
|Energy||13 January 2017||QLD||14 March 2017|
|14 January 2017||QLD||14 March 2017|
|2 February 2017||QLD||3 April 2017|
|6 February 2017||NSW, QLD||10 April 2017|
|FCAS||18 October 2016||SA||March 2017|
|9 November 2016||SA||March 2017|
|25 November 2016||SA||April 2017|
|23 January 2017||SA||April 2017|
* Under the Rules, the AER is required to publish the energy high price reports within 40 business days of the end of the week in which the high price event occurred. There is no similar timing requirement for high FCAS price reports.