The Australian Energy Regulator (AER) today published a report into a high energy price exceeding $5,000 per megawatt hour (MWh), in the National Electricity Market (NEM).
On 18 December 2021, the 30-minute price in South Australia reached $5,715/MWh for the 1 am 30-minute period.
The main drivers included an unexpected drop in wind generation, an outage to the Murraylink interconnector which limited South Australia’s ability to import energy from Victoria, and market participants’ rebidding energy capacity from low to high prices. A high price was not forecast.
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 numerous 30-minute periods.
A high price may occur due to several 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.