ANALYSIS: While our 'imperfect' electricity system is falling to pieces, are profits being made?
After a week in the stratosphere, a price cap of $300 per megawatt-hour was automatically triggered under rules overseen by the Australian Energy Market Operator .
So, what is really going on here? If the generators could find electricity supply when forced to, why was it not offered in the first place?When a price cap is imposed, generators can be compensated if they operate at a loss. AER chair Clare Savage has fired off letters to the generators noting their withdrawal of offers of supply "may be motivated" by "seeking to avoid" the compensation scheme for delivering power under a price cap, "in favour of" the compensation they get if they're forced by the AEMO to provide power.
Rules aside, it would also be morally problematic if electricity generators were playing chicken with the idea of blackouts in winter to improve their profitability.To be clear: it is unlikely households will experience blackouts or businesses forced to cut their energy use this week.