AER electricity wholesale performance monitoring - NSW electricity market advice - December 2017

Special report
Event date: 
8 September 2017
Release date: 
6 December 2017


The AER has released a report on high prices in the NSW wholesale electricity market. On 8 September 2017, the Federal Minister for Environment and Energy requested the AER monitor the NSW electricity market for features or behaviours that may be detrimental to effective competition, and provide advice to the COAG Energy Council on any factors affecting the efficient functioning of the market. The report examines what factors contributed to these market outcomes.

The current sustained nature of high wholesale prices in NSW is not being driven by extreme price events. The AER has found no evidence to suggest that prices are being driven by rebidding close to dispatch or physical or economic withholding - behaviours more usually associated with the exercise of market power. Both short-term fuel issues and longer-term market challenges are behind the ‘step change’ in wholesale prices. However, further work is needed to understand the impact of changing market features.