The National Electricity Market
August saw a mixture of ups and downs in average spot electricity prices, increasing in northern NEM States and falling in the Southern States. NSW increased the most – 37% to $174/MWh, while QLD increased 9% to $130. SA had the largest falls, decreasing 38% to $150. VIC averaged similar levels at $143 (down 4%), and TAS was down 29% at $129.
Electricity Generation Mix
Total grid-scale generation for August decreased by 9.8% from July levels – a large drop in operational demand due to warmer weather and the pick-up of roof-top solar output.
Solar generation increased significantly while Wind generation maintained the high levels from last month. This allowed Gas generation to reduce - 22% down on July. Coal also reduced by 13% for the month while Hydro was down 12%.
Gas Generation
Gas generation decreased in August - down 22% from July levels. Compared to 12 months ago gas generation was 17% more than it was in August 2023, but relatively constant compared to the previous 3 years.
By State, gas generation changes were all negative. VIC decreased 60% while SA dropped 26%. TAS, VIC and NSW had much smaller percentage decreases at 5%, 4% and 2% respectively.
Hydro Generation
Hydro generation decreased 12% in August compared to July levels and remained close to the lowest levels seen in the last 9-years, for this time of year, as shown below.
Storage in Hydro Tasmania’s lakes increased markedly in August especially the last week of the month. Storage ended the month at 6,030GWh (42% full), an increase of 1,077GWh over the month. This is still 9% less than at the same time last year but is now close to the 9-year average, as shown in the following chart.
Snowy Hydro’s storage was flat during August. Snowy finished the month 47% of full (2,509Gl) – unchanged over the month. Levels are close to the 9-year average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
The long-range forecast for spring (September to November) shows:
- Rainfall is likely to be above average for large parts of eastern Australia.
- Drier than average conditions are likely for much of WA.
- Warmer than average days and nights are very likely across most of Australia.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in August was 5,866GWh – 10% up on July and 17% more than the same month last year. Wind generation was flat at the same high levels as last month but up 29% compared to August last year. Utility Scale Solar generation was up 15% from June levels but down 3% over the same month last year. There was significant curtailment of both wind and utility scale solar generation as wholesale prices dived into negative territory for large parts of the month.
The following chart shows the monthly energy produced for each of these renewable types since 2017.
The Electricity Futures Market
Futures prices decreased in August, in all States, across all calendar years.
In NSW CAL25 was down 7% at $117/MWh, CAL26 was down 6% at $115.5, while CAL27 also closed at $115.5 - down 6% over the month.
Calendar Year Contracts for New South Wales
QLD prices for CY 2025 had a 4.5% decrease to $102. CAL26 decreased 3% closing at $96, while CAL27 finished down 2% at $92.
Calendar Year Contracts for Queensland
VIC futures prices for CAL25 closed down 8% at $72, CAL26 was down 4% at $68.5 while CAL27 was also down, closing at $67 – down 5%.
Calendar Year Contracts for Victoria
SA has less liquidity in the futures markets than other States, so changes tend to be lumpier and less a true reflection of the underlying market. For completeness we have included the graph below.
Calendar Year Contracts for South Australia
The Gas Market
Internationally, LNG netback prices ended the month up at $16.28/GJ – up 4% from last month. Forecast prices for 2024 increased to $15.31 – up 2% compared to July. Forecast prices for 2025 were up 4% at $17.98/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)
Domestic spot gas prices decreased again through August. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $13.3/GJ, a 6.5% decrease from July levels. This remains above the regulated gas price cap of $12/GJ but below the LNG netback price. Prices are 21% above what they were the same time last year.
Gas storage at the key Iona storage facility continued to fall at the start of August reaching a low point of 9.5PJ on the 9th August, before increasing for the rest of the month. Storage ended August at 11.9PJ – a 9% increase over the month. Storage is now close to “normal” levels we have seen at this time of year for the past 8 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 3 years as well as forecast pricing for the year ahead. There has been an increase in futures pricing over the last month.
The other main contributing factor to LPG prices in Australia is the exchange rate against the USD. There has been a significant increase in the last month which will put downward pressure on AUD LPG pricing.
The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in August were largely flat, ending the month at US$143/T – a 2% decrease on the July close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.
High international coal prices continue to be an important driver of high electricity prices especially in the States most reliant on black coal generation – ie QLD and NSW.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 4 years.
The bottom is falling out of the ESC market with certificate prices dropping by 20% to $13.75. ACCUs increased in price – up 3% to $35.35 while both VEECs and Spot LGCs dropped 1% to $108 and $44.5 respectively. STCs were unchanged at $39.9.
Future dated LGCs were largely up through August. CAL24 was up 1% at $45.75, CAL25 up 2% at $44.5, while CAL26 increased by 4% to $35.55. CAL27 increased by 9% to $30.55 while CAL28 dropped 4% to $25.25.
About this Report
This energy market summary report provides information on wholesale price trends for all regions within the National Electricity Market (NEM) and environmental scheme certificates.
Please note that all electricity prices are presented as a $ per MWh price and all certificate prices as a $ per certificate price.
All NEM spot prices are published by the Australian Energy Market Operator (AEMO). Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- NEM Spot market – AEMO publishes a range of detailed information which can be found here: https://aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard
- Weather and Climate data – The Bureau of Meteorology publishes a range of weather related information which can be found here: http://www.bom.gov.au/climate/
Disclaimer
This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance or guarantee as to the accuracy of information provided. To the maximum extent permitted by law, none of Smart Power Utilities Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.
© Copyright, 2024. Smart Power Utilities Ltd ABN 72 121 464 864
