An independent analysis of generator bidding behaviours will confirm whether the market is operating appropriately, following concerns about inappropriate bidding practices occurring in the wholesale energy market.

Federal Energy Minister, Josh Frydenberg, has asked the energy regulator to confirm that there are no inappropriate bidding practices taking place. This is in response to assumptions made in the Grattan Institute report about the operation of the wholesale electricity market.

The Australian Energy Council’s General Manager Corporate Affairs, Sarah McNamara, said that while the report’s call for market interventions is based on a simplified analysis of market bidding, there needs to be confidence in the workings of the market.

“The Australian Energy Regulator already closely scrutinises the behaviour of all generators in the system and there are strict rules in place to govern them,” Ms McNamara said.

“Its recent investigations of price spokes has not found any opportunistic bidding or abuse of market power. The wholesale market has functioned well.”

Ms McNamara said that the Australian Energy Council is aware that there are a range of complex factors behind price volatility in the wholesale energy spot market, and each price event is unique.

“As the Grattan Report notes, generators need to be able to rebid when generation capacity is suddenly not available, such as when unexpected outages occur. This is a legitimate market practice – rebidding does not constitute gaming of the market.”

“Given the focus on energy policy at the moment, it is critical that confidence in the market is maintained. Reforms to the market are already underway, and any further interventions would need thorough consideration.”

Lauren ‘LJ’ Butler is the Assistant Editor of Utility magazine and has been part of the team at Monkey Media since 2018.

After completing a Bachelor of Media, Communications and Professional Writing at the University of Wollongong in 2014, and prior to writing about the utility sector, LJ worked as a Journalist and Sub Editor across the horticulture, hardware, power equipment, construction and accommodation industries with publishers such as Glenvale Publications, Multimedia Publishing and Bean Media Group.

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