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) over the July to September 2023 quarter.
While average wholesale prices across the NEM from July to September 2023 were significantly below the levels from the same quarter in 2022, there were 10 high 30-minute prices during this period (compared to 16 high prices in the previous quarter and 16 high prices over the same period in 2022).
High prices from July to September 2023 included:
- 1 and 11 August in South Australia
- 4 September in Queensland and New South Wales
All the high prices were driven, in part, by limited access to cheaper generation from a neighbouring region during network outages or issues, and the reduced supply of low-priced capacity. Rebidding (a large proportion of which was for commercial reasons) also contributed to the high prices on each day.
- On 1 August in South Australia, a planned network outage on the South-East to Tailem Bend line restricted imports over the Heywood Interconnector, placing greater reliance on accessing low-priced generation from Victoria via the Murraylink interconnector. Low wind generation also reduced the amount of low-priced capacity available in the region.
- On 11 August in South Australia, extremely low wind generation, and network limitations on the Heywood and Murraylink interconnectors meant that South Australia had limited access to cheaper generation from Victoria. There were also multiple spikes in 5-minute demand that coincided with high price intervals.
- On 4 August in Queensland and New South Wales, an extended planned network outage limited the regions’ access to cheaper generation from Southern NSW and Victoria. A unit trip at Bayswater and technical issues at Vales Point and Millmerran compounded ongoing baseload outages. Higher than forecast demand also contributed to the high prices.
Background
The AER is required to report into significant price outcomes in the NEM.
A high price may occur due to a variety of 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.
The AER has published a Guideline for how we report into significant price outcomes.