From 1 October 2023, the Wholesale Electricity Market (WEM) operates under new rules where energy and five frequency co-optimised essential system services (FCESS) 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 market price limits, the alternative maximum STEM price for September 2023 (that is $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 proposed the value of Energy Offer Price Ceiling as $1500/MWh and released a draft determination on 8 April 2024. The draft determination was open for consultation until 31 May 2024.
The ERA received seven submissions during the consultation period.
After considering feedback from stakeholders the ERA will publish a final determination. The value of Energy Offer Price Ceiling will be implemented at least five business days after the final determination is published.
The ERA must publish the final determination by 1 January 2025.
