The National Electricity Market
July saw mainly reductions in average spot electricity prices from the high levels seen in June. NSW fell the most – 17% to $127/MWh, while VIC fell 9% to $149, and QLD also dropped 4% to $119. However, there was also a significant increase with SA going up 37% to $241 on the back of some high price events in that State. TAS was up slightly (1%) at about $180/MWh.
Electricity Generation Mix
Total grid-scale generation for July increased by 4.4% from June levels – corrected for the increased days in the month, and the pick-up of roof-top solar output, this amounts to an adjusted, small increase in demand.
Wind generation increased significantly coming off the extreme low levels seen in June along with a large increase in utility scale solar generation. This allowed gas generation to reduce - 11% down on June and Coal also reduced by 1% for the month.
Gas Generation
Gas generation decreased in July - down 11% from June levels. Compared to 12 months ago gas generation was 57% more than it was in July 2023.
By State, gas generation changes were mainly negative. NSW decreased 47% while SA and VIC dropped 14% and 12% respectively. TAS had the smallest decrease falling just 3%. QLD bucked the trend increasing 15% over June levels.
Hydro Generation
Hydro generation increased 2% in July compared to June levels but 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 continued to increase through most of July as efforts were made to conserve storage. Storage ended the month at 4,963GWh (34% full), an increase of 416GWh over the month. This is still 34% less than at the same time last year and is close to the lowest level seen in the last 9-years, for this time of year, as shown in the following chart.
Snowy Hydro’s storage continued the decline seen all this year to date during July. Snowy finished the month 47% of full (2,509Gl) – down another 4% over the month. Levels remain above 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 August to October shows:
- Rainfall is likely to be within the typical seasonal range for much of Australia, including coastal regions of NSW and Victoria.
- Wetter than average conditions are likely for parts of the south-east, central and far west; and drier than average for much of the tropical north and south-western Tasmania.
- Warmer than average days and nights are likely to very likely across most of Australia; however, periods of cold weather are still possible.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in July was 5,348GWh – the highest July level on record and 30% more than June’s disappointing result. It was 6% above July 2023. Wind generation was up 48% on June levels and up 1% compared to July last year. Utility Scale Solar generation was also up 9% from June levels and up 7% 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
Futures prices decreased in July, in most States, across all calendar years.
In NSW CAL25 was down 3.5% at $123/MWh, CAL26 was down 5% at $121, while CAL27 closed at $121 - down 7% over the month.
Calendar Year Contracts for New South Wales
QLD prices for CY 2025 had a 4.5% decrease to $104.5. CAL26 decreased 5% closing at $98, while CAL27 finished down 5.5% at $94.
Calendar Year Contracts for Queensland
VIC futures prices for CAL25 closed down 7% at $77, CAL26 was down 7% at $70 while CAL27 was flat, closing at $71.
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 flat at $15.65/GJ – up 0.5% from last month. Forecast prices for 2024 increased to $15.04 – up 0.5% compared to June. Forecast prices for 2025 were up 4% at $17.32/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 through July. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $14.3/GJ, a 7% decrease from June levels. This remains above the regulated gas price cap of $12/GJ and close to the LNG netback price. Prices are 35% above what they were the same time last year.
Gas storage at the key Iona storage facility continued to fall gradually through July before an accelerated drop off towards the end of the month. Storage ended the month at 11PJ – a 26% decrease over the month. Storage is now close to the lowest levels we have seen at this time of year for the past 8 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ 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 a decrease 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 drop in recent times which will put upward 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 July were up, ending the month at US$140/T – a 6% decrease on the June 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 expired at the end of June this year.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 4 years.
After last month’s large decrease, VEECs regained most of what it lost, increasing 8% to close at $109.5. Other certificate prices were largely flat or fell. ESC’s decreased 7% to $17.2 and Spot LGCs dropped 3% to 44.75. ACCUs increased marginally to $34.25 while STCs were unchanged at $39.9.
Future dated LGCs were again down across the board through July. CAL24 was down 3% at $45.4, CAL25 also down 3% at $43.5, while CAL26 decreased by 2% to $34.2. CAL27 decreased by 16% to $28 while CAL28 dropped 9% to $26.2.
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
