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 17 February 2022, the 30-minute price in Tasmania reached $7,783/MWh for the 8.30 pm 30-minute period.
The main drivers included a network constraint managing a planned line outage in Tasmania, requiring the region to supply its own local Frequency Control Ancillary Services. Capacity was unable to make it to market due to ramp up limitations and trade-offs between the energy and ancillary service markets.
In addition, there was limited access to low priced capacity due to planned generator outages and offers below their registered capacity, as well as forced flows from Tasmania to Victoria.
A high 30-minute price was not forecast to occur. Rebidding of capacity by generators and the Basslink interconnector from low to high prices did not contribute to the high price.
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.