The Australian Energy Regulator (AER) has released a report which analysed the trading periods between April and June 2023 where energy prices exceeded $5,000 per megawatt hour (MWh) in the National Energy Market (NEM).
There have been improved outcomes in wholesale energy markets, with average wholesale electricity prices significantly lower than the record highs seen in 2022. There has also been a reduction in the number of these high price events, with 30-minute prices exceeding $5,000 per MWh 16 times over this period compared to 42 times over the same period in 2022.
A common driver of the high prices in the quarter to June was network outages or issues which limited the relevant region from importing cheaper generation from a neighbouring region.
A second driver was reduced supply in low-priced capacity. In South Australia this was due to periods of low wind and solar output. For Queensland and New South Wales, the reduced supply of low-priced capacity was due to:
- Up to 3,500MW of ongoing planned and unplanned baseload generator outages
- Reduced availability of low-priced black coal due to technical issues
- The closure of Liddell Power Station in New South Wales at the end of April
Rebidding contributed to most of the high prices discussed in the report. On most occasions, these rebids were for technical reasons, such as units failing to start and plant issues. However, on other occasions, these rebids were for commercial reasons such as lower forecast prices or managing a constraint.
These 30-minute events do not reflect the average wholesale price over the period. This reporting framework is intended to pick up outlier events.
For more information on wholesale market trends, refer to AER’s wholesale performance reporting and to read the full report, visit www.aer.gov.au.
