NSW home batteries capture $2 million from power price spike during heatwave

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NSW batteries profit heatwave

Highlights

NSW wholesale electricity prices spike to $23,107/MWh during Monday's heatwave as demand rises by almost 2,000 megawatts and coal, transmission constraints bite.
Household batteries, with over 700,000 units installed, earn Amber Electric's 30,000 customers $2 million in two hours by exporting during five-minute price surges.
Analysts warn the episode highlights vulnerabilities in the National Energy Market as battery and grid-scale storage rise to over 9 gigawatts, but transmission expansion lags amid climate-driven risks.

Heatwave, outages and curtailment squeeze NSW supply

As reported by ABC News, NSW wholesale electricity prices surge on Monday afternoon as demand rises in hot weather while coal capacity and transmission availability are constrained.

Prices peak at $23,107 per megawatt hour, just below the market cap, and exceed $5,000/MWh in 11 separate five-minute intervals. Temperatures in Sydney reach 34.7 degrees at Observatory Hill, more than 12 degrees above the long-term monthly average, adding to pressure on the grid.

At the same time, four of NSW's 12 coal-fired generating units are offline and two more are operating at reduced capacity. Several high-voltage transmission lines are also running below capacity because of maintenance, limiting the flow of electricity into Sydney and forcing curtailment of renewable generation and storage in southern NSW just as prices move above $10,000/MWh.

Australian Energy Market Operator says demand rises by almost 2,000 megawatts within an hour during Monday's heatwave. The operator also says about 2,400 megawatts of coal-fired generation capacity is unavailable across NSW, including two units at Eraring Power Station.

Battery trading gains and wider market implications

Household batteries emerge as a major factor in the price swings as owners respond to phone alerts and export power during short price spikes. Dave Smith, a wholesale power market designer, says these behind-the-meter systems can inject large volumes into the grid and then pull back in the next five-minute interval, amplifying volatility because the market operator cannot directly control them.

Dan Adams, co-CEO of Amber Electric, says the retailer's 30,000 customers make about $2 million in two hours, or $69 each on average, with top earners taking in more than $500. He says such price spikes are part of how the market works and argues batteries and electric vehicles are increasingly displacing gas-fired generators during demand peaks.

Analyst Tristan Edis says the episode exposes a structural vulnerability in the National Energy Market as climate change narrows traditional maintenance windows for coal plants and raises the risk of hotter spring and autumn periods. He says Australia has been slow to expand transmission, while AEMO chief Daniel Westerman says batteries, both large and small, are increasingly setting wholesale prices as storage capacity grows across the market.

More than 700,000 household batteries have been installed, mostly within the past year, and AEMO estimates more than two million will be installed by 2030. Grid-scale battery capacity has more than doubled in the past year to more than 9 gigawatts, but analysts say Monday's whiplash shows more work is needed to make household batteries a stabilizing force and to ensure extra wind and transmission are built to support the grid.

In our earlier article on the UK’s push to commercialise nuclear fusion, we explained how governments and companies are intensifying efforts to move fusion from the lab toward industrial-scale power generation. We also highlighted UKAEA’s view that advances such as superconducting magnets and higher-pressure performance in the Mast Upgrade machine are sharpening a strategic race with China, with major implications for long-term energy security and future electricity supply.

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