The National Electricity Market
Wholesale electricity prices in February increased in all States apart from QLD. SA increased the most, up 89% to $91/MWh. VIC also had a significant increase, up 42% at $69/MWh. NSW and TAS had much smaller increases, up around 7% to $90 and $122 respectively. QLD was the only State where there was a drop in average price, down 34% to $75/MWh.
Electricity Generation Mix
Total grid-scale generation for February decreased by 6% from January levels. Given that there are 3 fewer days in February, this corresponds to an increase in underlying demand for the month.
Solar generation decreased as did Coal and Wind. Gas generation was up 11% while Hydro generation also increased by a small amount.
Gas Generation
Gas generation increased in February – up 11% compared to January. Compared to 12 months ago gas generation was 9% lower than it was in February 2024.
Gas generation was up in all States. VIC gas generation rose 96% from low levels last month. SA increased 7%, QLD 5% and NSW 2%. TAS increased by 90% on very small numbers.
Hydro Generation
Hydro generation increased 1% in February compared to January levels, below the average levels seen in the last 10-years, for this time of year, as shown below.
Storage in Hydro Tasmania’s lakes fell through February. Storage ended the month at 5,999GWh (42% full), a decrease of 435GWh over the month. This is 7% more than the same time last year and above the highest level seen in the last 10 years, as shown in the following chart.
Snowy Hydro’s storage fell during February. Snowy finished the month 45% of full (2,389Gl) – a 3.5% decrease over the month. Levels remain just below the 10-year average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
The long-range forecast for March to May shows:
- rainfall is likely to be in the typical range for the season for most of Australia, with below average rainfall likely for much of northern, eastern and central Queensland and above average for parts of north-western Australia
- warmer than average days are very likely across most of Australia, with an increased chance of unusually high daytime temperatures across much of the country
warmer than average nights are very likely across Australia, with an increased chance of unusually high overnight temperatures nationwide
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in February was 6,870GWh – down 9% from last month’s record level, but up 15% on the same month last year. Utility Scale Solar generation was down 11% from January levels but up 8% over the same month last year. Wind generation decreased 2% from last month but was also up 22% compared to February 2024.
The following chart shows the monthly energy produced for each of these renewable types since 2017.
The Electricity Futures Market
Futures prices decreased through January in all States, across every calendar year.
In NSW CAL25 was down 13% at $110/MWh, CAL26 was down 5% at $119, while CAL27 also closed down 5% at $117. CAL28 settled at $120.5 – down 3%.
Calendar Year Contracts for New South Wales
QLD prices followed a similar pattern to NSW. CY 2025 was down 15% at $96. CAL26 decreased 6% closing at $101, while CAL27 finished down 4% at $94. CAL28 traded down 5% at $92.
Calendar Year Contracts for Queensland
VIC futures prices for CAL25 were down 9% at $76, CAL26 was down 2% at $75, while CAL27 was down 1% at $73. CAL28 was flat at $74.
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 $20.59/GJ – up 6% from last month. Forecast prices for 2025 were down 4% at $19.25/GJ. Forward prices for 2026 were also down 7% at $16.25/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 were flat through February. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $13.7/GJ, a 1% decrease from January levels. This is still well below the LNG netback price. Prices are 16% above what they were the same time last year.
Gas storage at the key Iona storage facility rose significantly through February. Storage increased to 22.5PJ – a 15% increase over the month. Storage is close to the maximum levels we have seen at this time of year for the past 9 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 4 years as well as forecast pricing for the year ahead. Futures pricing were flat over the last month.
The other main contributing factor to LPG prices in Australia is the exchange rate against the USD. The exchange rate increased during February to close to 0.64 before falling, ending the month close to where it started - just above 0.62, near the lowest levels seen in recent years. This would tend to push up LPG prices when quoted in AUD.
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 fell to the lowest levels seen in 4 years, ending the month at US$100/T – a 16% decrease 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.
International coal prices continue to be an important driver of 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 4.5 years.
Prices were down for environmental certificates through February for all varieties apart from STCs which were flat. Spot LGCs fell 16% to $25.75 while ACCUs dropped 5% to $33.4. VEECs were down 3% at $108 while ESCs were also down 2% at 13.95.
Future dated LGC prices were down significantly in all years. CAL25 was down 12% at $27.75, while CAL26 decreased by 7% to $23.75. CAL27 fell by 20% to $17.35 while CAL28 fell 10% to 17.1. CAL29 fell 9% to $16.35.
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
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