The NEM market suspension
High fuel costs, generator outages, administered pricing, withdrawn availability and reserve shortfalls made normal dispatch increasingly unworkable before AEMO suspended the spot market.
Permanent case linkYour task
Distinguish the verified sequence from competing mechanisms, reconcile the teaching cost bridge and identify evidence needed for a conditional response.
Your role
Analyst reconstructing a market event
Practice data & worked solution
Price and volume: a separate teaching exercise
Original synthetic data, NOT prices, demand, losses or compensation from the June 2022 suspension. Four consecutive five-minute intervals; MW values are average customer load for each interval. The customer buys at the stated energy-only prices, with no losses, hedges, network/retail charges, taxes or other settlement adjustments. Reference load is 120 MW and reference price A$50/MWh throughout. Period numbers are teaching labels, not historical timestamps.
| Period | Duration minutes | Average load MW | Price AUD per MWh | Reference load MW | Reference price AUD per MWh |
|---|---|---|---|---|---|
| 1 | 5 | 120 | 50 | 120 | 50 |
| 2 | 5 | 180 | 100 | 120 | 50 |
| 3 | 5 | 240 | 300 | 120 | 50 |
| 4 | 5 | 180 | 150 | 120 | 50 |
Your analysis
- Convert load into MWh, reconcile interval and total costs, and compare the energy-weighted price with the simple average. Explain the difference.
- Bridge the total cost change using reference-volume price effect, reference-price volume effect and their interaction. State why this arithmetic does not establish a causal explanation of market prices.
- Independent transfer: move 5 MWh from period 3 to period 1, holding prices and total energy fixed. Calculate revised average MW and costs. Separately use the official historical sources to build an event/publication timeline and identify evidence needed for two competing mechanism explanations.
Worked solution
Quantity and cost reconciliation
Energy is 10, 15, 20 and 15 MWh, totalling 60 MWh. Costs are A$500, A$1,500, A$6,000 and A$2,250: total A$10,250. Weighted unit cost is about A$170.83/MWh. The simple mean is A$150/MWh; multiplying it by 60 gives A$9,000, A$1,250 too low because energy and price co-vary.
A complete bridge, not causal proof
Reference energy is 40 MWh and cost A$2,000. The increase is A$8,250. For each interval expand QP − Q0P0 = Q0ΔP + P0ΔQ + ΔQΔP. The summed terms are A$4,000, A$1,000 and A$3,250 respectively. All three reconcile the change. They do not prove why a price changed or identify participant intent. Historical analysis needs independent availability, bid, demand, flow, constraint and notice evidence.
Load-shift variant and historical evidence
Moving 5 MWh between equal five-minute intervals changes average load by 60 MW. Revised loads are 180, 180, 180 and 180 MW; energy remains 60 MWh. Revised costs are A$750, A$1,500, A$4,500 and A$2,250: total A$9,000, saving A$1,250. This assumes real flexibility and unchanged prices; neither is established by the arithmetic. The historical timeline must cite official pages or notices, separate decision-time information from later findings, and never label these synthetic values as June 2022 observations.
Review your response
- Arithmetic: interval duration, weighted price, reference values and all three bridge components reconcile.
- Evidence: original synthetic inputs are separate from historical facts, with event time, publication time and source references recorded.
- Causality: two plausible explanations are compared; specify an observation that would weaken each, rather than attributing the event from a chart alone.
- Decision: the load shift has a feasibility caveat, and the memo states a conditional action and missing evidence. No actual participant loss or misconduct is inferred from this exercise.
This checklist supports self-review. No tutor marking or independent credential is included.
Related topics 7
Sources & evidence
AEMO’s review covers 10–24 June 2022, not eleven days of suspension. Administered pricing began in Queensland on 12 June and NSW, Victoria and South Australia on 13 June. The NEM spot market was suspended on the afternoon of 15 June; suspension was lifted at 14:00 AEST on 24 June. Official AEMO event reports establish the historical timeline; the separate synthetic CSV for cost decomposition. Detailed interval bids, constraints and participant exposure are additional evidence to obtain, not supplied records.
AEMO · June 2022 sequence of events