The Australian Energy Regulator (AER) today published a report into energy prices exceeding $5,000 per megawatt hour (MWh) in the National Electricity Market (NEM) during January, February and March 2024.
This follows a separate report published by the AER on 5 April 2024 into high electricity prices in Victoria, Tasmania and South Australia during February 2024, as well as high local Frequency Control Ancillary Services (FCAS) prices in South Australia, which were related to a significant storm in Victoria on 13 February.
During the quarter, 30-minute wholesale energy prices exceeded $5,000 per MWh 26 times, compared to 12 during the same period last year. High prices from January to March 2024 included:
- 19 January in Queensland for one 30-minute period
- 21 January in Queensland and New South Wales for two 30-minute periods
- 27 January in Queensland for one 30-minute period
- 29 January in Queensland for three 30-minute periods
- 23 February in Queensland for one 30-minute period
- 26 February in Queensland for two 30-minute periods
- 29 February in Queensland and New South Wales for four 30-minute periods (3 in Queensland and 1 in New South Wales)
The high prices were driven by a variety of factors including weather conditions and network constraints:
- Queensland experienced hot and humid conditions across January and February driving high demand. This coupled with baseload outages meant that market conditions were particularly tight. New South Wales also saw some days of high demand.
- Network congestion limited Queensland and New South Wales’ ability to access lower-priced energy. Congestion in northern New South Wales reduced Queensland’s ability to access lower-priced energy through New South Wales, while congestion in southern New South Wales reduced its ability to access lower-priced energy from within the region, as well as from Victoria.
- Rebidding also contributed to the high prices. On most occasions, these were for technical reasons, however, we also observed some rebidding for commercial reasons.
The AER also referenced the high price events during January, February and March 2024 and their impact on wholesale electricity prices in its Wholesale markets quarterly – Q1 2024 report, published 18 April 2024.
Background
The AER is required to report into significant price outcomes in the NEM.
A high price may occur due to a variety of 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.
The AER has published a Guideline for how we report into significant price outcomes.