The Australian Energy Market Commission (AEMC) has released its schedule of reliability settings which outlines the maximum price for electricity for both an individual dispatch interval as well as the maximum cumulative price. The current maximum price of $14,200/MWh will increase to $14,500/MWh and the cumulative price threshold will increase from $212.800 to $216,900.
The maximum price sets the highest cost a generator can be paid in any period and consequently what a consumer can be exposed to. It is escalated each year in line with CPI to encourage new peaking plant to enter the market if needed.
The cumulative price threshold aggregates the trading intervals over the last seven days. If they add up to more than the cumulative price threshold, the prices received by a generator and paid by a retailer will be $300.00/MWh, until the day after the aggregate of the last seven days drop back below the cumulative price threshold. This is put in place to ensure retailers are not exposed to unlimited price risk if there are local issues in a region.
The market floor price (minimum price a generator can receive) has not been escalated and is staying the same at -$1,000/MWh.
All changes take effect 1 July 2018 and more details can be found on the AEMC’s website here.
If you would like to understand how these changes will affect your energy prices please contact Edge on (07) 3905 9220 or 1800 334 336.
