What is a price spike?

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A price spike occurs when the wholesale price is many times higher than normal, possibly up to ~$17/kWh. Price spikes occur for just a few hours each year (or around 0.1% of the time), usually in January, and are typically caused by high demand on the grid stretching the available supply. Price spikes may be forecast to occur outside of Summer, but are unlikely to end up happening.

There is a higher likelihood of price spikes occurring in the early evening on very hot days, because this is when everyone gets home from work and runs their air conditioners, straining the grid. It’s also worth noting that price spikes are less common in NSW and QLD because these regions have more "on-demand" supply.

Some of the most polluting and expensive generators in Australia exist purely to capitalise on stretched supply, charging exorbitant prices to bring the grid into balance. By reducing your usage during spikes, you'll not only save on your power bills, you'll also keep more money out of the pockets of these expensive and dirty generators.

It's all part of getting to a better energy future for Australia.

What will I pay during a spike?

With Amber, you'll always pay the live price for any 30 minute interval. This also applies during spikes, so it's really important to reduce your usage as much as possible during times when the wholesale price is expensive.

Remember that the average rates we quote at Amber include some usage during spikes. It's OK if you can't turn off completely. If you can totally avoid spikes, you'll save above and beyond our typical yearly rates.

And remember: we'll make sure that over the course of a year your average per kWh price will be less than or equal to the DMO, or we'll refund the difference.

What should I do during a spike?

Most spikes only last 1 - 2 hours. The best thing you can do minimise costs during a spike is to shift energy intensive activities earlier or later during the day.

Energy intensive activities include:

  • Cooking
  • Heating and cooling (excluding fans)
  • Using electric kettles
  • Washing (laundry or dishes)
  • Showers and baths using electric hot water

There are some things you can keep doing even when the wholesale price is spiking, because they use a lot less power than your appliances, and therefore will still be relatively cheap to run:

  • Run fans to keep cool
  • Continue with normal use of your lights
  • Use electronic devices, such as your TV or laptop
  • Continue running always on devices, such as your fridge

Why do some forecast spikes end up not happening?

The wholesale price forecast is based on a bidding war between electricity generators. Often, generators put in more competitive bids throughout the day, meaning a price spike that is forecast in the morning may end up not happening.

Even if price spikes don't happen, prices are likely to be more expensive than usual, so it's worth checking your Amber app frequently and reducing your usage as much as possible during expensive times.

Don't forget:  We guarantee you will never pay more than the Default Market Offer on average over a year, or we’ll refund the difference.

Does Amber offer any kind of price protection?

Do I get notified of an unexpected wholesale pricing event?

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