Is the wholesale price capped during a price spike?

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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, with prices ranging from $3/kWh to these peaks historically occurring a handful of times each year. However, in times where there is reduced capacity, volatility or disruptions in the market, price spikes can happen more often.

These maximum prices aren't set by Amber. Instead, they're based on the maximum price that generators can be paid for their power - a price which is capped by the energy market operator (AEMO).

This is the true price we must pay the generators and networks for your usage during price spikes.
If we artificially capped the wholesale price we would need to recoup the difference elsewhere, by charging you more per kWh year-round to cover the cost of your usage during price spikes.

This is exactly what the big energy retailers do. They don't care how much power you use during spikes, because they charge you more year-round to cover the cost (and then some!). Many of the big energy retailers also own and operate the expensive and dirty power plants that make most of their money during price spikes.

Instead of a price cap, we add a small charge for Price Protection Hedging to the wholesale price year-round which acts as a form of insurance against high prices. We pass this back to customers in the form of our Quarterly Bill Guarantee: over the course of a year, we guarantee that on average you'll never pay more for your electricity usage than the rates quotes in our Energy Factsheets, or we'll refund the difference.

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