PRICE SPIKE – sounds scary, right? But it shouldn’t. In most cases it’s a classic case of “its bark is worse than its bite”.

So we’ve put together some info to help you understand price spikes, and what they mean for you.


Why do prices spike?

Fundamentally, prices spike because there isn’t enough low cost electricity in the market to meet demand. Once the market responds, and releases more low cost electricity, the spike subsides.


How long does a price spike last?

A price spike, by definition, will be very brief – usually one, and occasionally two 30-minute trading periods. The prices around a spike might be higher than normal as the price lifts, and then subside back to normal levels.


How much does a price spike cost?

It depends how much electricity you use in that half hour period, and what price the spike hits. Here you can see what different levels of electricity consumption at different prices will cost:

Usage x Price_Cost

How much electricity you use depends on what you have running. Some common appliances use roughly* the following amounts in half an hour:

Appliances_units per HH

It’s important to remember that generation costs – the part of your bill affected by price spikes – are only about 1/3rd of your weekly power bill, so the overall impact of a price spike on your bill will usually be minor.

Fee Breakdown


How common are price spikes?

Price spikes, by definition, are any price over 30cents/kWh. Prices go over that threshold less than 1% of the time. Once in a blue moon prices will go extremely high (like $5/kWh).

But 48.54% of prices are less than 6cents/kWh – so if you are comfortable riding the highs and the lows, the low prices will save you far more than the price spikes will cost you. That’s how we save Flicksters money!

Distribution of spot prices

So will I save with Flick?

Throughout the year it’s likely that there’ll be a few weeks where you don’t save with Flick, for example, when spot prices are a bit higher than normal due to a supply and demand imbalance, or the odd price spike.

In February 2015 there was lots of generation maintenance, and weather conditions were dry, so we saw the highest overall February spot prices in ten years. In early June 2016 we had an evening where the spot price hit its highest level in three years (source: Energy News). These things do happen!

But lifetime-to-date, across all of our Flicksters, savings are 19% – we are confident that, with time, you will be better off with Flick. That’s why we tell you each week what you’ve saved, and how much better off you are since joining Flick.

LTD savings


Want to learn more about spot prices?

For the technically minded, we’ve written a blog about how forecast prices move to final prices.


* Depends on the make and model

29 Comments on “Price Spike 101

Leave a Reply

Your email address will not be published. Required fields are marked *