Independent analysis of generator bidding behaviour has reaffirmed that the electricity market is operating appropriately and does not support allegations of “generator gaming”.
The Australian Energy Council’s Chief Executive Sarah McNamara said that detailed analysis by the Australian Energy Market Commission has confirmed that price volatility and rebidding in the wholesale market had been incorrectly labelled as gaming.
The AEMC today released its assessment of rebidding in the national electricity market.
“It does not support claims that generators have misused their market power to force up wholesale prices.
“This should provide confidence, in addition to earlier regulatory reviews of bidding practices, that the market continues to work as it is designed to.
“The AEMC found that the cost of price spikes for which rebidding was a cause has actually fallen since 2015.
“The report found that where price volatility increased between 2015 and 2017, it was driven by factors unrelated to rebidding such as incorrect demand forecasts and a generator tripping which leads to a lower power supply.
“This report highlights that there are a range of complex factors behind price volatility in the wholesale energy spot market, and each is unique. It also reinforces that rebidding is a legitimate market practice and does not add up to gaming of the market.
“As noted by the AEMC rebidding can help lower wholesale prices. It also allows generators to respond to changing market conditions, so it is critical to the daily operation of our power system.”
About the Australian Energy Council
The Council represents 22 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
The Australian Energy Council has welcomed the release of the Energy Security Board's options paper,which is the result of a substantial consultation process.
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