We haven't seen a price cap in 10 years, but it looks like it was a no-brainer.
👉 Background: The Australian Energy Market Operator (AEMO) is in charge of managing electricity and gas markets across Australia. It's responsible for making sure Aussies have access to secure, reliable and affordable energy
👉 What happened: The wholesale price of gas has soared to an astounding 80 times normal levels. So, the AEMO has been forced to set a $40-per-gigajoule cap on gas markets in Sydney, Melbourne and Brisbane.
👉 What else: Even with the cap, $40 is still more than four times average prices. It's the first time the price cap has been used in the last decade... Goes to show it's a pretty volatile time for the energy market.
💡 The wholesale power market always experiences a jump in demand during winter... But this winter is a new dawn ❄️.
💡There have been outages at old coal-fired power plants... the war in Ukraine... and just for fun, throw in some extreme cold weather this week causing the highest gas demand in three years.
💡All of this has increased prices in the wholesale market, making it unaffordable for some providers to do business. As a result, some smaller gas retailers have sought emergency measures, some have collapsed, and Aussie households are facing another source of financial stress.
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