SUN SHINES ON POWER BIDDING Regulator in favour of transparency in market
TOWNSVILLE’S Sun Metals zinc refinery is leading fundamental reforms to Australia’s electricity market aimed at making wholesale pricing more transparent and, hopefully, cut sky- high power bills.
But Queensland Government- owned generators and Townsville- based power retailer Energy Queensland, which is “strongly opposed” to the proposal, have warned the costs of implementing the changes could far outweigh the benefits.
Sun Metals, whose annual power bills have soared to more than $ 70 million, called on regulator the Australian Energy Market Commission in 2015 to change trading periods on the open market from 30- minute to five- minute settlements.
Now the commission appears to have backed Sun Metals, stating an “initial position” that five- minute settle- ments are in the long- term interests of consumers.
There are claims Queensland’s generators have been gaming the market by boosting pricing at the end of the 30- minute trading periods to more than $ 13,000 per megawatt hour.
Because the 30- minute trading price is averaged over five- minute blocks, it has meant consumers such as Sun Metals have been unwittingly locked into higher prices.
Burdekin MP Dale Last and Sun Metals complained about the late bidding practices of generators, with Mr Last saying in 2015 that the practice was “nothing short of price gouging”.
The commission sought to combat volatile pricing by introducing requirements last year for generators to justify late bidding but is now looking to implement Sun Metals’ suggestions.
Yesterday, Mr Last said companies such as Sun Metals were being bled for cash.
“By manipulating the wholesale price and the bid- ding process, were charging amounts up to MWh,” Mr Last said.
“We talk about supporting industry and creating jobs but all this was doing was driving industry and investment out of Queensland.”
Energy Minister Mark Bailey said he supported the detailed AEMC consultation process and would also support a change that enabled quicker and more efficient responses in a market that had substantially changed since its inception in 1998.
“Of course, any substantial ( generators) ridiculous $ 13,500/ change would need a transitional process to enable a smooth changeover,” he said.
In a submission, Energy Queensland says the cost impost of the changes will be “significant and broad”.
“This is due to all participants having to invest in replacement trading, settlement and billing systems in order to maintain business operations in a five- minute market,” the submission says.
The AEMC has extending the date for publishing its draft determination to September 5 to consider more than 40 industry submissions.
FIRED UP: Sun Metals CEO Yun Birm Choi.