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Posted 3 years ago | 2 minute read

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AEMO predicts price peak

The Australian Energy Market Operator (AEMO) is forecasting a +$14k/MWh price peaks across the NEM markets on 30 June.

Driven by the impact of the Russian invasion of Ukraine pushing up gas prices and the knock on impact on power prices, it is estimated that from 17.00 to 19.30 on 30 June, prices on the spot market could reach:

New South Wales price and demand forecast

Source: AEMO

While there is a risk that, if sustained these high prices could force the regulator to re-impose the price cap, for businesses with flexible assets there is an opportunity for significant intraday trading and revenues from grid programmes. Capturing 1 hour of this would earn in the Wholesale Demand Response Mechanism (WDRM) the equivalent of 2 weeks value in Frequency Control Ancillary Services (FCAS).

Over recent weeks AEMO has made a number of interventions in the market to protect consumers, including imposing a $300/MWh cap on the wholesale price of power. But this brought further consequences as the price cap meant that many generators didn’t operate, with the result being a big reduction in the amount of capacity online. As a result for 10 day trading was suspended in the NEM.

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