Understanding 5 minute settlements and AEMO prices

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This deals with one of the more complicated intricacies of the National Electricity Market. The price variation you are referring to is due to how the dispatch and settlement work on the AEMO.

As an Amber customer, you will only pay for wholesale electricity in 30 minute periods, based on your usage in that 30 minutes. This is the same for everyone buying wholesale electricity throughout the market.

However, in the energy market Generators set their price bids every 5 minutes, meaning the wholesale price will change every 5 minutes based on these bids. Then at the end of a 30-minute block, the 6 individual 5-minute dispatch prices are averaged to create the 30-minute settlement price, that all customers pay, for energy consumed within that 30 minute period (and generators receive this settlement price for anything generated).

You can see the 2 prices on the AEMO website if you toggle between 5 min and 30 min prices.

What that means is that technically the final settlement price for a 30 minute period won’t be confirmed until 25 minutes into that period (i.e. when the last 5 minute dispatch period has the price set). In practice, this isn't a particularly big issue, as AEMO (the market operator) released an estimate for what the 30-minute price is going to be, and we use that estimate, combined with the live 5 minute changing prices to show you, in the app, what is likely to be the final 30-minute price.

Therefore, the price you see in our app is constantly being calculated and updated using this mixture of the 30-minute estimate & a rolling average method over the course of the 30 minutes. And because of this, you are likely to see some price fluctuations if you look at the Live Price a few times during a 30 minute period.

The way the market operates is actually changing in 2021 when it is going to move to 5-minute prices for dispatch and settlement.

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