How often have price spikes occurred in recent years?

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A price spike is defined as an event where the wholesale price of energy jumps to $3/kWh or more. 

The maximum wholesale price is around ~$19/kWh (inc. GST) throughout most of Australia, and $21/kWh in SA (inc. GST). Prices this high are generally rare. 

In calendar year 2023, we saw price spike events of $3/kWh or more on the following number of days in each state:

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On average, the price spike last for around three quarters of an hour in each case. 

So far in 2024, we have seen one big price spike event in Victoria, when Loy Yang A coal power plant was shut down as a result of damage to transmission lines on a scorching and windy day. A price spike at this level is very unusual in Victoria, as you can see from the table above. 

What causes price spikes?

There is a higher likelihood of price spikes occurring in the early evening on very hot (or very cold) days, because this is when everyone gets home from work and runs their air conditioners (or heaters), straining the grid.

Some of the most polluting and expensive generators in Australia exist purely to capitalise on stretched supply, charging exorbitant prices to bring the grid into balance. By reducing your usage during spikes, you'll not only save on your power bills, you'll also keep more money out of the pockets of these expensive and dirty generators.

It's all part of getting to a better energy future for Australia.

What should you do during a price spike?

To minimise your costs during a spike you need to shift particularly power hungry activities earlier or later to try to avoid the spike. 

Here are some tips on how you can reduce your costs during a price spike. 

Note: If you have solar and a compatible and enrolled battery, minimising your usage at these times will allow SmartShift to export more of your excess energy to the grid during these critical times. This gives you an opportunity to get rewarded for supporting a strained grid.

Learn more about how our SmartShift battery customers exported into price spikes during the recent Victorian energy outage

How will price spikes affect my bill?

Despite prices rising to unusually high levels on these days, mostly your overall cost will tend to average out at a much lower rate. You can check Your Week With Amber in the Usage tab in the app to get a sense of what your average looks like. 

Bear in mind that not all forecast price spikes eventualise. It's worth keeping an eye out at these times to see where prices settle before you put on any heavy appliances. 

Our Bill Guarantee is here as a back up

We pass through the 30 minute wholesale electricity prices to you directly, and over the long-term this is typically a competitive offer, but to give you peace of mind we guarantee that over the course of each quarter you'll never pay more than our Bill Guarantee rates on average for your usage, or we will credit you the difference.

A couple of weeks before the start of each quarter we will set the rate for each network for the quarter, and let all our customers know. Winter months tend to have slightly higher and more volatile prices on average, so the guarantee rates that cover winter months will likely be higher than those that cover summer months.

You can find the Bill Guarantee rates for the current quarter here for customers in Victoria and here for customers outside Victoria.

How do price spikes work with other energy companies?

All energy companies pay this higher wholesale price for the power they sell to their customers during price spikes - but most of them simply charge you higher rates year-round to cover their costs on the assumption that you’ll use heaps of expensive and dirty power during these times. This means that with most traditional energy companies, you can still end up paying for price spikes even if you reduce your usage when they happen.

Amber gives you a unique opportunity to completely avoid paying these higher prices - both year-round, and when price spikes happen.

 

 

 

 

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