Wholesale electricity prices in South Australia above $5000 per MWh have triggered an inquiry by the Australian Energy Regulator (AER).
Following separation of South Australia from the eastern states around 12.30pm on March 2, 2020, energy prices in South Australia were above $5000 per MWh for the 2pm and 2.30 pm trading intervals. The AER says it will publish a report into these high prices within 40 business days, by April 29, 2020.
In addition, the regulator says there were a number of trading intervals throughout the afternoon where the price of market ancillary services in South Australia was above $5000 per MW. It will also be publishing a report into these high prices.
Related article: SA bushfire victims to get free home battery
The Australian Energy Regulator (AER) monitors and reports on wholesale electricity markets. As part of this role, it reports on events that result in wholesale electricity spot prices exceeding $5000 per megawatt hour. Most customers are not directly exposed to wholesale electricity prices.
Energy retailers are the main purchasers in the wholesale electricity market. Retailers bundle electricity with network services for sale to their residential, commercial and industrial customers. Generators and retailers can manage their exposure to price variations in the wholesale market by entering hedge contracts that lock in firm prices for the electricity they intend to produce or buy.
Related article: Olympic Games going green