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AEMO activates wholesale electricity price caps in NSW
“Under the National Electricity Rules, AEMO applied an administered price cap of $600 per megawatt hour ($/MWh) and floor price of -600 $/MWh from 7:55pm Wednesday 8 May 2024.
Administered price caps will remain until wholesale electricity prices in New South Wales fall below the cumulative price threshold, possibly not until next week.
Despite these high wholesale electricity prices, at present there is sufficient electricity to meet demand in New South Wales and throughout the National Electricity Market.
In the 48 hours leading up to initiating the price cap, a number of major generation units went offline in New South Wales while scheduled maintenance was also taking place on transmission lines.”
What do we know so far?
“This followed a period of almost uninterrupted spot price volatility in excess of $1,000/MWh (indeed, mostly above $10,000/MWh) commencing 15:40 this afternoon (NEM Time) and running through until 19:50.
Ability to import from QLD (to the north) and VIC (to the south) has both been severely limited – with network outages playing a role.
Renewable penetration was low through the past couple days – low solar (due to season, and also due to weather), and also low wind.
Vales Point Unit 5 had come offline this morning in an outage not planned in advance, and also that there were two Eraring units off on unplanned outages.”
Looking ahead
- Market focus is shifting forwards from the current quarter with NSW financial year 2025 seeing a $10 increase with high volume.
- One Eraring unit is back but might be offline over the weekend.
- Still seeing low wind and solar but weather is clearing with more favourable forecasts.
*Disclaimer: This article is general information only and does not constitute financial advice. Electricity and gas commodities are volatile markets and prices vary daily.
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