marginal generator

Price Setting Concepts – an Explainer

Guest author, Allan O’Neil, contributes to our series of articles explaining how prices are set the the NEM (as part of how dispatch works). In this article, Allan explains some of the details in the AEMO’s “Price Setter” file.

A (preliminary) Intermediate Guide to How Prices are Set in the NEM

In the process of assembling a long-range data set on how much every single generator has contributed to the price of Energy in each Region of the NEM (which we’re doing for our Generator Report Card 2018) we’ve pulled some preliminary analysis together here of how many dispatch intervals since 1st January 2018 see the Price Setter files highlight instances of setting the price ranging:
from “Very Simple” (at Category 1)
… to “Very Complex” (at Category 5)

If you increase your consumption of energy at a time when average emissions intensity is low, you’re not necessarily doing a good thing for the environment

A quick note about the need to avoid focusing on average emissions intensity (for the wrong reasons) and losing sight of the fact that it’s the emissions intensity of the next marginal unit of production that should be used for making short-term consumption decisions (if the objective is reducing your environmental footprint, as an energy user).