Since 1 October 2023, the Wholesale Electricity Market (WEM) has operated under new rules where energy and five frequency co-optimised essential system services are co-optimised and dispatched in five-minute intervals.
Offers in the WEM are capped at the Energy Offer Price Ceiling to mitigate the exercise of market power.
Under the transitional provisions for the commencement of the new market, the alternative maximum STEM price for September 2023 ($738/MWh) was applied as the Energy Offer Price Ceiling from 1 October 2023.
That price ceiling will be replaced by the value determined the ERA’s current Energy Offer Price Ceiling review. The ERA must review the Energy Offer Price Ceiling at least once every three years following this review.
2024 Review
The ERA released a first draft determination on 8 April 2024, proposing an Energy Price Offer Ceiling of $1,500/MWh.
Following changes in the WEM Rules relating to Energy Offer Price Ceiling calculations, the ERA has re-calculated the Energy Offer Price Ceiling as $1,100/MWh and released a second draft determination.
The ERA is inviting interested parties to provide feedback by Wednesday, 4 December 2024.
The ERA is seeking submissions from stakeholders on the estimated value for the Energy Offer Price Ceiling, and on the ERA’s approach to calculating a price ceiling.
After considering feedback from stakeholders, the ERA will publish a final determination. The value of the Energy Offer Price Ceiling will be implemented on 1 January 2025.
