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High SA Electricity Prices: A Market Power Play?

South Australia has a small and relatively isolated electricity market. In April, May and early June of 2013, that market was subject to a prolonged period of chronic supply shortage as some major generators were off line in the winter period and one of the major interconnectors to the eastern states was constrained.  South Australia has a small and relatively isolated electricity market.  There were no supply interruptions but the tight supply conditions were occasionally overlaid with acute periods of very short supply when low cost sources of electricity were few.  On 18 such occasions generators offered electricity to the system at prices above $5000/MWh, that is two orders of magnitude above the normal price. The questions are how to interpret that behaviour and what might be done about it.

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Published Date: 
Friday, 6 December 2013