The Australian Energy Regulator (AER) has today published a report into prices on 12 March 2021 in the wholesale electricity market in South Australia (SA).
On 12 March 2021 the spot price in South Australia exceeded $5,000 per megawatt hour (MWh) six times between 6 pm and midnight.
The AER’s analysis found the following factors contributed to the high prices:
- A fire at the Torrens Island substation led to equipment failing onsite and the trip of Barker Inlet station.
- Generation capacity at Torrens Island was severely limited due to the fire and the risk of the whole plant tripping.
- Rebidding capacity as unavailable and from low to high prices.
- Calm conditions meant output from wind generation was very low.
- Due to network repairs, imports into SA on the Heywood Interconnector were also limited to around 250 MW.
Given the loss of generation, along with limited imports from neighbouring regions the dispatch price was set between $10,000/MWh and $15,000/MWh on 28 occasions. The loss of supply also led to spare capacity in the region falling below safe operating levels so AEMO directed plant online.
More in-depth analysis of these events can be found in the AER’s 12 March 2021 report.
The AER monitors and reports on the causes for wholesale electricity spot prices exceeding $5,000/MWh. The wholesale electricity spot price exceeding this threshold triggers the AER reporting.
There can be many reasons a high spot price occurs, 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.