The Australian Energy Regulator (AER) has today published a report into a high energy price exceeding $5,000 per megawatt hour (MWh), in the National Electricity Market (NEM) on 20 October 2021.
On that day, the 30-minute price in Queensland reached $5,234/MWh for the 5.30 am 30-minute period.
The main drivers included limited access to low-priced capacity due to generator outages and reduced generator availability. There was also around 700 MW of low-priced capacity unable to make it to market because of generator ability to ramp up or come on within 5 minutes.
Rebidding of capacity from low to high prices contributed to a price above $5,000/MWh. At the time, 26% of capacity in Queensland was offered above $5,000/MWh and up to 32 MW of high priced capacity was required to meet demand.
More information can be found in the AER’s 20 October 2021 report.
Background
The AER is required to publish a report whenever the electricity 30-minute price exceeds $5,000/MWh or 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 a number of 30-minute periods.
There can be many reasons a high 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.