The Australian Energy Regulator (AER) monitors and reports on wholesale electricity markets. As part of this role, we report on events that result in wholesale electricity spot prices exceeding $5000 per megawatt hour (MWh).
Most customers are not directly exposed to wholesale electricity prices. Energy retailers are the main purchasers in the wholesale electricity market. Retailers bundle electricity with network services for sale to their residential, commercial and industrial customers. Generators and retailers can manage their exposure to price variations in the wholesale market by entering hedge contracts that lock in firm prices for the electricity they intend to produce or buy.
On Thursday 19 December 2019, the spot price in South Australia reached the market price cap of $14 700/MWh on two occasions at 7 pm and 7.30 pm.
We will publish a report into these high prices within 40 business days, by 21 February 2020, on the AER’s website.
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