The National Electricity Market
February saw significant increases in wholesale spot prices in all States apart from QLD, with several weather-related high price events driving average prices up. VIC prices increased 275% to $83 impacted by storms on the 13th Feb that caused widespread damage to electricity infrastructure and spot prices that rose to the market cap for a number of hours. SA was up 102% to $66, TAS up 63% to $82 and NSW up 38% to $112 – all impacted by some high temperature events during the month. QLD went the other way, falling 25% to $120 as January’s price increases were partly reversed.
Electricity Generation Mix
Total grid-scale generation for February decreased by 3.8% from January levels – corrected for the reduced days in the month this amounts to a significant increase. Some late summer higher temperatures in the South-East of the country and reducing daylight hours for roof-top solar generation will have contributed to this increase.
Gas and hydro generation increased significantly from January levels while wind and utility solar generation fell.
Gas Generation
Gas generation increased significantly in February - up 14% from January levels. Compared to 12 months ago gas generation was 29% more than it was in February 2023.
By State, gas generation changes were mixed. VIC increased 743% on low numbers, NSW was up 99% and SA up 14%. On the flip side, the largest State for gas use, QLD, dropped 4%, and TAS decreased 72% (on very small numbers).
Hydro Generation
Hydro generation increased 12% in February compared to January levels and was above the 9-year average as shown below.
Storage in Hydro Tasmania’s lakes reduced through February. Storage ended the month at 5,602GWh (39% full), a decrease of 458GWh over the month. This is 3% more than at the same time last year and close to the maximum level seen over the last 9 years, for this time of year, as shown in the following chart.
Snowy Hydro’s storage decreased significantly during February. Snowy finished the month 59% of full (3,112Gl) – down 3.5% over the month. Levels remain above the 9-year maximum for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
March to May rainfall is likely to be below median for much of northern, eastern and south-western Australia.
March to May maximum and minimum temperatures are likely to very likely to be above median for almost all of Australia.
March to May maximum temperatures are at least 3 times more likely than normal to be unusually high for most of the northern half of Australia, western WA, and northeast Tasmania.
March to May minimum temperatures are at least 3 times more likely than normal to be unusually high for much of western and northern Australia.
The long-range forecast is influenced by several factors, including record-warm oceans globally and a weakening El Niño.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in February was 5,981GWh – down 7.2% on last month and 9% up on February 2023. Wind generation was down 11% on January and down 1% compared to February last year. Utility Scale Solar generation was down 6% from January levels but up 18% over the same month last year.
The following chart shows the monthly energy produced for each of these renewable types since 2017.
The Electricity Futures Market
Prices were mixed across all States in February across all calendar years. In NSW CAL24 was up 2% at $91, CAL25 was down 0.5% at $98, while CAL26 closed at $105 - down 3.5% over the month. CAL 27 also fell 4% over the month to $110.
Calendar Year Contracts for New South Wales
QLD prices for CY 2024 had a 2% decrease to $90.5. CAL25 increased 3% closing at $87, CAL26 finished down 0.5% at $86, while CAL 27 was down 2% at $84
Calendar Year Contracts for Queensland
VIC futures prices continued the variability of other States. CAL24 closed up 10% at $57, CAL25 was up 2.5% at $60 while CAL26 was down 3% closing at $56. CAL 27 ended the month trading down 3% at $57.
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 at $12.03/GJ – down a further 14% from last month. Forecast prices for 2024 fell again to $12.77 – down another 8.5% compared to January. Forecast prices for 2025 were also down 7.5% at $13.4/GJ.
Domestic spot gas prices increased through February. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $11.8/GJ, a 5% increase from January levels. This is still slightly below the regulated gas price cap of $12/GJ, and also below the LNG netback price. Prices are 10% below what they were the same time last year.
Gas storage at the key Iona storage facility decreased slightly through February. Storage ended the month at 21.8PJ – a 1% decrease over the month. Storage is now slightly below the highest we have seen at this time of year for the past 8 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ 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.
The other main contributing factor to LPG prices in Australia is the exchange rate against the USD. As shown below this has been falling over the last few years adding to domestic LPG prices.
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 February increased, ending the month at US$132/T – a 14% lift on the January 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. However, the coal price cap of $AUD125/tonne introduced by Governments in December 2022 has dampened the impact on electricity prices. This cap is due to expire at the end of June this year.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 3.5 years.
Environmental certificates mainly fell in price during February. VEECs finally reversed some of their recent increases, falling 5% in the month. They are now sitting at $91/certificate. Spot LGCs had a 3% decline in price while ESCs were down 6%. STCs were up slightly at $39.65 while ACCUs rose 3% to $36.
Future dated LGCs were a mixed bag through February. CAL24 fell by 3% to $46.5, CAL25 increased 1% at $47, while CAL26 decreased by 1% to $39. CAL27 increased by 2% to $33.25 while CAL28 dropped 2% to $27.3.
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/
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