Heatwave and coal outages deliver $2 million payday for NSW home battery owners

A spring heatwave and coal outages have delivered a $2 million payday for home battery owners in New South Wales, as electricity prices skyrocketed to record levels on the National Energy Market (NEM).

On Monday afternoon, temperatures in Sydney spiked at 34.7 degrees, more than 12 degrees above the long-term monthly average, pushing electricity prices to $23,107 per megawatt hour (MWh), just shy of the market cap.

How it happened

The extraordinary spike in prices was fueled by a confluence of factors, including a spring heatwave, coal-fired generating units being out of action, and high transmission lines running below capacity due to maintenance.

"It's normal for electricity prices to be high when temperatures go noticeably above 30 degrees," said Tristan Edis, CEO of Green Energy Markets.

"What's problematic is that doesn't normally happen in October."

According to Edis, the price spike was a reminder of an underlying NEM vulnerability in a rapidly warming climate as it tried to manage aging coal plants while building generation and storage.

The impact on home battery owners

For people with solar panels on their roofs and batteries in their garage, it was a chance to make money selling power back to the grid at much higher rates.

"Rolling power spike pricing, have made $100 in an hour selling 30kw/h," one Reddit user commented.

"Solid effort!!," replied another.

Dan Adams, co-CEO of Amber Electric, an online energy retailer that connects and enables battery owners to trade on the NEM, said revenue on Monday was "probably" a record.

"Those 30,000 customers made $2 million in the space of two hours," he said.

"So $69 each on average, and the top earners made over $500."

The future of energy

Edis said Australia had been slow to rebuild its electricity grid and was now facing a potentially record El Niño, a natural climate phenomenon that can bring hotter, drier conditions.

"Let's just hope that the coal generators are going to be able to get us through another summer and will be reasonably reliable," Edis said.

"Batteries, large and small, are fundamentally changing the way energy is produced, consumed and priced," AEMO CEO Daniel Westerman said.