The Australian Energy Regulator (AER) monitors and reports on events and causes when the ancillary service payment in Victoria’s Declared Wholesale Gas Market (DWGM) exceeds $250 000.
On 14 October 2016 the ancillary service payment did not exceed this amount but was instead a negative payment of $365 612. This was the largest negative payment since 2008.
Negative payments are not uncommon in the Victorian gas market and analysis by the Australian Energy Market Operator (AEMO) has found that they work as intended.
The AER is not required to report on negative payments but has chosen to do so as we believe there are benefits in increasing understanding of these ‘opposite’ outcomes.
More in-depth analysis of this event can be found in the AER’s 10 March 2017 negative ancillary payment report.
The AER’s role in monitoring wholesale energy markets and reporting on price events helps to enhance market transparency and build a culture of compliance. Our analysis provides a foundation to detect non-compliance, market irregularities, inefficiencies and consumer harm. We draw on this work to advise the COAG Energy Council, other stakeholders and market bodies on wholesale market issues.
In addition to this report the AER will shortly be publishing reports on the following high price events in the wholesale gas markets.
| Market | Event date | Region | Expected publication date |
|---|---|---|---|
| Sydney STTM | 7 November 2016 | NSW | 29 March 2017 |
| Adelaide STTM | 21 November 2016 | SA | 29 March 2017 |