The perfect storm: analysing the role of gas in South Australia's power prices

In July this year, South Australia experienced a series of high wholesale electricity price spikes in one week, which some politicians and media commentators simplistically linked to the state’s high proportion of renewable energy, particularly wind (For example, Australian Financial Review 2016; The Advertiser 2016a; The Australian 2016). This was incorrect. The mistaken attack on renewables enabled the principal reasons and parties responsible for the high price events to slip under the radar and largely avoid public scrutiny. This briefing paper analyses the role the “gentailers” (generator-retailers, companies owning both power plants and retail businesses) played in the high wholesale price spikes in South Australia, the lack of competition, and the conditions which enabled these companies to exercise the full force of their market power.

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