If you're an Amber customer in NSW, you might have noticed something unusual on your app over the past couple of days. Electricity prices didn't just spike - they went on a rollercoaster ride that's relatively rare to see in the National Electricity Market.
On Tuesday, NSW spot prices swung from the Market Price Cap all the way down to near the Market Price Floor in a single day. On Wednesday, it happened again. But, this time, the swing was even more extreme and happened within just one hour.
Let's unpack what drove these price movements and what they tell us about Australia's changing electricity system.
The numbers
On Wednesday at midday, NSW spot prices hit the Market Price Cap of $20.30/kWh. Four dispatch intervals later (about 20 minutes), they started dropping. By around 1pm, prices had plummeted to almost negative $1/kWh - virtually the Market Price Floor.
That's a $21.30/kWh price spread in about an hour. For context, Tuesday's spread was $21.02/kWh across the full day. Both days saw prices hit the absolute ceiling and floor of what's possible in the market.
Since the introduction of 5-minute settlement, it's relatively uncommon to see both extremes in a single day. Seeing it happen on back-to-back days is even more notable.
What caused it
Wednesday started hot across NSW. By 9:30am local time, temperatures at Sydney Airport were already above 30°C. Air conditioners were running, and electricity demand was climbing.
Then, around midday, fast-moving storm cells rolled across central NSW toward Sydney. These storms brought localised cloud cover and rain - and suddenly, rooftop solar generation dropped off.
Here's where it gets interesting. AEMO (the Australian Energy Market Operator) has a tough time forecasting during conditions like this because they can't directly see rooftop solar output. When thick cloud cover moves quickly across metropolitan areas, it can cut rooftop generation with very little warning. For about 15 to 45 minutes, that cloud band appears to have heavily reduced rooftop solar across Sydney and surrounding areas.
The result? A sharp, temporary spike in net demand right when the grid was already stretched.
On the supply side, several factors limited how quickly generation could respond. The 750 MW Eraring Unit 4 had only just returned from a three-month planned outage that morning. Other units were still offline, including the 685 MW Bayswater Unit 1 and 680 MW Vales Point Unit 5. The 850 MW Waratah battery remains unavailable following a transformer incident last month.
Network constraints also bound hard during the spike. With a transmission outage on the Avon-Marulan 330 kV line, the grid's ability to move generation from other parts of NSW to meet the sudden demand surge in Sydney was limited. During the peak, more than half of NSW's wind and solar availability appears to have been curtailed due to network constraints.
All of these factors converged in a very tight window. Prices spiked to the cap.
Then, as quickly as it started, the storm passed. Solar generation bounced back. Demand eased as temperatures cooled. And prices collapsed into negative territory.
What this means for the grid
These events are a window into how Australia's electricity system is evolving.
Our grid now has significant rooftop solar capacity that's largely invisible to the market operator. When weather conditions change rapidly, that invisibility creates forecasting challenges and can contribute to sudden demand swings.
We're also seeing how network constraints interact with renewable generation. During Wednesday's price spike, the physical dispatch price in NSW reached $34,532.33/MWh - far above the Market Price Cap. The only way this happens is when constraints, not generator bids, are setting the marginal cost of generation. In other words, the grid wanted to dispatch more generation to meet demand, but network limitations prevented it.
At the same time, we're managing a transition period where thermal generation is being retired or undergoing extended maintenance, while new capacity is still coming online. That means the supply mix available to respond to sudden demand changes is shifting.
What it means for Amber customers
For customers with batteries or flexible loads, these price movements create real opportunities. When wholesale prices spike to $20/kWh, exporting stored energy to the grid becomes extremely valuable. When prices drop into negative territory, charging batteries or running high-power devices means you're being paid to use electricity.
The key is being able to respond quickly when conditions change. Wednesday's price movements happened fast - the full swing from cap to floor took about an hour. Customers who could react to those signals saw significant value.
Looking ahead
As more renewable energy comes online and coal plants continue to retire, we're likely to see more of this kind of volatility - not less. Weather will play an increasingly important role in real-time supply and demand. Network constraints will continue to bind as the system adjusts to new generation patterns. And the value of flexibility, whether from batteries, demand response, or other sources, will keep growing.
For Amber customers, that means staying connected to wholesale prices isn't just about saving money on average. It's about being positioned to respond when the market moves, and playing a role in helping the grid navigate these transitions.
Tuesday and Wednesday were masterclasses in how quickly conditions can shift. And they're a preview of the kind of dynamic electricity system Australia is building as we move toward 100% renewables.
