As an electricity generator, Stanwell participates in the National Electricity Market through the physical electricity spot market and the electricity contract market.

The electricity spot market

The electricity spot market is a highly regulated, highly competitive market, in which electricity supply and demand are instantaneously matched in real time. Generators, like Stanwell, offer to supply the market with specific amounts of electricity at particular prices. These offers are stacked in ascending price order and then progressively scheduled into production to meet demand,  tarting with the least-cost generation option.

The spot price is calculated on a half hour basis and is the average of the six, five-minute dispatch periods. This is the price all generators receive for production during this period.

There are more than 50 market participants in the National Electricity Market, any of which can set the price.

Want to know more about the electricity spot market? Watch our video here.

The electricity contract market

Stanwell manages the financial risks associated with spot price volatility by participating in the contract market to lock in firm prices for longer periods of time. In the contract market, Stanwell sells electricity hedge contracts to large energy users and retailers.

These contracts accounted for about 75 per cent of our total income in 2017/18. These contracts provide revenue certainty for Stanwell and cost certainty for our customers. As a large diverse portfolio owner, Stanwell is able to offer a broad range of electricity contracts that can be tailored to meet customers requirements – it’s not one size fits all.

Keen to learn more about Stanwell’s role in the National Electricity Market (NEM)? Watch our video here.