Administered Price Caps – Electricity
- Electricity spot prices in Queensland reached a cumulative high price threshold of $1,359,100 (accumulated over seven days) on 12 June 2022, triggering an administered price cap of $300/MWh in accordance with the National Electricity Rules.
- The price cap will remain in place at least until the end of the trading day (4am this morning), after which it will only remain in place if the cumulative price threshold is still exceeded. The market will be notified when the cap is lifted.
- Price scaling in regions connected to Queensland through regulated interconnectors, and that have a net energy flow towards Queensland, have also been implemented from 13 June 2022 in accordance with the National Electricity Rules. This application of scaling will remain in place until the price cap lifts.
- A compensation regime (administered by the AEMC) is in place under the market rules for registered participants impacted by the administered price cap.
- In recent days, the seven-day cumulative spot price in several National Electricity Market (NEM) regions has been close to the cumulative price threshold at times. Should this threshold be exceeded in any region, AEMO automatically applies the administered price cap of $300/MWh.
- Working with market participants and relevant authorities, AEMO will continue to monitor cumulative price thresholds across all NEM regions and will issue updates if the situation develops
- Further information regarding administered pricing is available on the AEMO website and information regarding the compensation guideline is available on the AEMC website.
- As a consequence of the administered price cap in Queensland, AEMO has seen generation bids reduce and has issued Lack of Reserve (LOR) notices in both Queensland and New South Wales, signalling a reduction in pre-determined electricity reserve levels.
- To maintain power system security and reliability, AEMO has directed some generators to continue meeting consumers’ demand to improve reserve conditions. At this time, there is no impact to consumer supply.
- AEMO has also issued a forecast Lack of Reserve 3 (LOR3) market notice for Queensland from 5pm to 8:30pm (AEST) on 13 June 2022. LOR3 signals a deficit in the supply/demand balance.
- AEMO will take available actions to deliver additional supply or demand reduction, to maintain power system security.
- AEMO will continue to monitor reserve conditions closely in Queensland, New South Wales, and more broadly across the NEM, providing further updates should conditions change.
Administered Price Caps – Gas
- Gas prices for the Sydney Short Term Trading Markets (STTM) and Victoria Declared Wholesale Gas Market (DWGM) remain capped at $40/GJ after reaching cumulative high price thresholds in Victoria on 30 May and Sydney on 7 June.
- This will remain capped in both markets until the cumulative price falls and remains below the threshold for a day. View AEMO’s latest statement on gas price caps here.