Generator Financial Performance in the SEM for Financial Year 2021

Today, we are publishing the latest report on the financial performance of generators operating in the Single Electricity Market (SEM). This report summarises the performance of generators during the 2021 calendar year. 

All generation companies with a combined ownership capacity of greater than or equal to 25MW and operating in the SEM are included.  The report provides aggregated information on the financial performance of generators in the SEM along with a breakdown by generation fuel source. The 2021 report has shown a large increase in the gross and net margin of generators operating in the SEM when compared to previous years. This has been caused by a number of inter-relating factors including lower availability of efficient generation, higher levels of demand and lower levels of generation from wind units.  

Global markets began to see the impact of increases in wholesale fuel costs during this period.  The significant increases in commodity costs drove up end electricity prices and resulted in governments across Europe implementing measures to address the increasing energy prices.

Generator investments are capital-intensive, long-term investments, and made on the presumption of a degree of variability in revenues, and profits over the economic life of an asset. While this reporting year clearly reflects a year of particularly high revenues, this should be understood in the context of a number of years of lower margins and expected long-term decrease in market revenues for conventional generators with the ongoing roll-out of low or zero marginal cost generation. As we move through the energy transition, the continued roll-out of a diverse range of renewable technologies – robust to low-wind periods – combined with new efficient gas generation will support consumer interests in the medium to long term.

This report provides greater insight into market outcomes which may inform policy decisions, incentivise innovation and encourage new, efficient generation to invest in the market.

You can view the full report on the publications section of our website.