AEMO restores power “market”, prices explode

The MSM is preoccupied with the latest culture war today while the meltdown in the core of the Australian economy gets ever worse.

On Friday, the geniuses at AEMO restored the National Electricity Market (NEM):

AEMO will formally end the suspension of the wholesale electricity spot market in all regions of the National Electricity Market (NEM) from 2pm today (AEST).

On Wednesday 15 June 2022, AEMO announced the suspension because a confluence of events has made it impossible to continue operating the spot market while ensuring a secure and reliable supply of electricity for consumers.

The current energy challenge in eastern Australia is the result of several factors across the interconnected gas and electricity markets. This includes periods of high electricity demand, coupled with a large volume of generation unavailable due to maintenance or unplanned events, planned transmission outages and high energy commodity prices.

Returning to regular operations of the NEM is now possible, as we are currently seeing more normal electricity bidding and dispatching through AEMO’s automated resources, along with reduced electricity shortfalls and fewer manual interventions needed by AEMO.

Normal electricity bidding? Who are they trying to kid? Here’s the recent price action:

And for context, price averages for recent years:

The gas market is still stuck at $40Gj:

It looks to me like the generators have successfully bullied the AEMO into restoring a failed power market and are now raping all comers. It may even be that the threat of another suspension is now benchmarking prices at $500MWh because that’s the new marginal gaming price in that event.

This is a failed market led by a failed regulator in real-time, with real and catastrophic economic consequences dead ahead as the CPI spikes, the RBA hikes interest rates to the moon, house prices crash and the last of our manufacturing is thrown into the sea.

And for what? Making room for tax-free war-profiteering foreign mining and exporting our key energies to China to send back as aircraft carriers.

Domestic reservation, export levies or super-profits taxes for the coal and gas cartels NOW!

Houses and Holes
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Comments

  1. Ronin8317MEMBER

    Nothing will get done until people starts seeing their power bill going up 100%. I expect that once the fuel excise holiday goes away, we’ll see $3 at the pump (because, market!!) and an inflation print at 10%. The bond market may be wrong because they’re aiming too low, 7% cash rate!!

    All this because Albo won’t pull the gas reservation/export restriction trigger.

    • You are right, but by then when people feel the pain in their pocket it may be over for Labor as those swing voters will be back believing the LNP’s best economic managers fallacy.

      • Oh Totes where art thouMEMBER

        My previous comment was marked as spam. Not sure why. I’ve got an article published over at Independent Australia talking about this issue. You are 1000% correct.

    • I’ve received a letter from my supplier, Simply Energy, stating that my power bill will rise by 28% from 1-Aug….that’s about $900 per year in their estimation. I thought about a letter to MP’s (local member is LNP) and state Senators…..but I might as well be shouting at a wall. Suggest I target letters to Independents and see if they can live up to their mantra!!

      • I thought about a letter to MP’s (local member is LNP) and state Senators

        Please do so. I haven’t sent many letters recently. They can’t do any harm.
        I suggest you start your letter

        I AM TELLING ALL MY FRIENDS TO VOTE YOUR PARTY LAST UNLESS xxxx happens.

        Those scoundrels cannot be motivated by what is right. Only fear of losing power will motivate them.

      • bolstroodMEMBER

        I suggest we all take a leaf out of the Climate Activist hand book and start blocking roads tunnels, bridges and parliament Houses until the government bl00dy well kicks the living sh1t out of the Cartel and nationalises OUR natural resources.

        • drsmithyMEMBER

          Best be cautious, between five-figure fines, multi-year gaol sentences and police looking the other way while when someone tries to run you over, protesting is becoming a risky game.

    • Australian Government: A pack of scoundrels elected by a herd of morons.

      This is overwhelmingly true. Maybe 10% of politicians are decent, and maybe 30% of voters actually think.

      Nothing will get done until people starts seeing their power bill going up 100%.

      Yes. That fits the model.

  2. Albo’s Labor not even going to manage one term.

    PS. Re China, they are showing zero tact & cultural awareness as they try to muscle in on the last day of PIF (Pacific Island Forum), almost as if it’s a critical part of their plan for eastern hemisphere domination.

    • TailorTrashMEMBER

      More arrogant overreach …..hope the islanders recognise what it will be like once the have invited them fully in

  3. Who set the $40 price cap and what mechanism was used I wonder? Why was it set at $40 and not at $10 for example?

  4. “Domestic reservation, export levies or super-profits taxes for the coal and gas cartels NOW!”
    “Yeah, well, that’s just, like, your opinion, man.”

  5. Labor’s hands are tied – they are only the government. It’s great to see our (few remaining) producers and manufacturers get back to the really important technical work of following the spot electricity market, to see if they can afford to operate for the next hour or two. Remember the bad old days, when they sort of knew the price of power, and they just made stuff to sell.

  6. They wont act until household gas and electricity bills reflect the impact. Then, everyone – the MSM, think-tanks, the opposition – will jump in big time and perform all the softening needed for Albowen to do the necessaries. My 5c…

  7. Wow Albo really is a pathetic as Gillard was! I’m not suggesting Morrison was any better, but if 50c kWh is the new normal for wholesale then I would expect to see Bunnings having a run on pitchforks this weekend

  8. Over the last five decades Australia has become the land of the big rort.

    Elites have used rorts to increase their share at the expense of plebs. Big rorts are easy to find. There are obvious large parasites feeding off them. I can list a few. I am sure you can too:
    * property zoning (eg AKA property “development”)
    * extraction industries.
    * Banking
    * Superannuation
    * Privatised airports
    * Privatised roads
    * Privatised govt – eg. consultants
    * Private employment agencies
    * immigration
    * Rorty schemes with “subsidies” pink batts, childcare, ……
    * duopolies (Coles/Woolies, Telstra/Optus, Bunnings/Bunnings, …
    * energy rorts
    * water rorts
    * food rorts
    * drug rorts

    A problem with the big rort model is that once a citizen is sucked completely dry, there is nothing more to rort. It is like a body taken over by several huge parasites. The only way the parasites can grow further is to start attacking each other. We are now at that point IMO.

  9. Record levels of wind and solar, record prices!
    Still think nuclear isn’t economically viable now?