The Perfect Storm: Analysing the Role of Gas in South Australia’s Power Prices

19.08.16 By
This content is more than 7 years old

South Australia’s power companies made over $178 million in net margin during the July high price events, our new report has found.



1. Interstate controlled power companies used the recent interconnector transmission line outage with Victoria to exploit their strong gas generation market positions in South Australia, driving up prices to extreme levels. Renewable energy was used as the scapegoat, but prime responsibility actually lies with profit maximisation by the power companies.

2. South Australia’s gas generators earned around $178 million in net margin on the spot market during the July high price events.

3. The media focus on renewable energy enabled the parties and reasons responsible for South Australia’s recent high price events to avoid public scrutiny. There is considerable cause for regulators to review the recent events in South Australia.

4. Increasing reliance on high-priced gas is not a viable solution to reduce power prices or to tackle climate change.

5. South Australia needs more competition from more energy supply sources to put downward pressure on power prices. This means:

6. Regulatory and governance structures of the National Energy Market (NEM) should be reviewed to ensure they are fit to manage the transformation to an energy future focused around renewables.