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).
On 8 March 2022, the 30-minute prices in Queensland was between $9,081/MWh and $15,100/MWh for the 6 pm to 7.30 pm 30-minute periods. The following day, on 9 March 2022 at 3.30am, the 30-minute price in Queensland was $5,097/MWh.
The high prices on 8 March were caused by higher than forecast, record demand driven by high temperatures in the region. At the time there was limited access to lower priced capacity from the rest of the NEM due to a constraint managing a planned outage.
High prices were forecast. Market participants’ rebidding capacity from low to high prices did not contribute to this price event.
The high price on 9 March was caused by a significant change in market conditions when Pump 1 at Wivenhoe reduced its load to 0 MW. Due to ramp down constraints, 22 generators were unable to set the price for the 3.15 am interval and the price was set at $15,100/MWh. The following 5-minute interval had incorrect input data, therefore the price was again set to $15,100/MWh.
The 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.
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