In the Wholesale Electricity Market (WEM), participants offer energy and essential system services to meet real-time demand for energy. Offers into the day-ahead Short-Term Energy Market (STEM) and the Real-Time Market, which is comprised of an energy and five Frequency Co-optimised Essential System Services markets, are based on the cost of supply and are subject to a set of Market Price Limits.
The Market Price Limits comprise:
- Energy Offer Price Ceiling
- Energy Offer Price Floor
- Frequency Co-optimised Essential System Service Offer Price Ceiling
The new Market Price Limits will be reviewed every three years. Transitional arrangements require that:
- The Energy Offer Price Ceiling that will apply from the New WEM Commencement Day is deemed to be the value equal to the Alternative Maximum STEM Price under the Pre-Amended Rules immediately prior to the New WEM Commencement Day. The Economic Regulation Authority must complete its first review of the Energy Offer Price Ceiling by 1 June 2024.
- The Energy Offer Price Floor that will apply from the New WEM Commencement Day is deemed to be the value equal to the Minimum STEM Price that applied under the Pre-Amending Rules immediately prior to the New WEM Commencement Day. The Economic Regulation Authority must complete its first review of the Energy Offer Price Floor by 1 June 2025.
- Prior to the New WEM Commencement Day, the Economic Regulation Authority must determine the values of the Contingency Reserve Raise Offer Price Ceiling, Contingency Reserve Lower Offer Price Ceiling, RoCoF Control Service Offer Price Ceiling, Regulation Raise Offer Price Ceiling and Regulation Lower Offer Price Ceiling (FCESS Offer Price Ceilings) that will take effect from the New WEM Commencement Day. The Economic Regulation Authority must complete its first review of the FCESS Offer Price Ceilings by 1 June 2026.
As part of its Energy Transformation Strategy, the State Government is currently amending the WEM Rules to give effect to the new market design that is scheduled to take effect from 1 October 2023. This includes changes to the existing energy price limits framework. More information is available on the State Government’s website.
