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 9 December 2021 the 30-minute price in Queensland reached $7,118/MWh and $11,538/MWh for the 6:30 pm and 7 pm periods, respectively.
The main drivers included high demand due to warm temperatures, and limited access to low-priced capacity. The latter was due to generator outages and reduced availability, while cheap imports from NSW were limited across the Queensland-New South Wales Interconnector.
High prices were forecast from the previous day. Rebidding of capacity from low to high prices did not contribute to the high price.
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.