The Australian Energy Regulator (AER) today published a report into a high energy price exceeding $5,000 per megawatt hour (MWh), in the National Electricity Market (NEM).
On 10 January 2022 the 30-minute price in South Australia reached $11,489/MWh for the 12:30 pm 30-minute period.
This was caused by high demand, due to warm temperatures and an abrupt fall in rooftop solar output, and a reduction in wind and solar grid generation. These factors were pronounced because a constraint on the Heywood interconnector reduced South Australia’s ability to import energy from Victoria.
A high price was not forecast. Market participants rebidding capacity from low to high prices did not contribute to this price event.
Background
The AER is required to publish a report whenever the electricity 30-minute price exceeds $5,000/MWh and when prices for a market ancillary service over a period significantly exceed the relevant 30-minute price for energy and exceed $5,000/MW for numerous 30-minute periods.
A high price may occur due to several 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.