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 Friday 1 March the spot price in Victoria and South Australia exceeded $5000/MWh on three occasions each, from 3.30 pm to 5 pm (market time).
In Victoria the price reached $6915/MWh at 4 pm, $12 635/MWh at 4.30 pm, $12 472/MWh at 5 pm.
In South Australia the price reached $6765/MWh at 4 pm, $12 609/MWh at 4.30 pm and $12 067/MWh at 5 pm.
We expect to publish the report into these high prices within 40 business days, by 1 May 2019, on the AER’s website.
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