The National Electricity Market
June saw large increases in all States apart from NSW where the instances of extreme prices seen in May reduced, and its average price returned to the “pack”. NSW spot prices averaged $153/MWh – down 44% on May prices. QLD prices increased 35% to $125 while SA and TAS were both close to $175 (up 25 - 30%). VIC prices increased by a similar amount – up 24% at $164.
Electricity Generation Mix
Total grid-scale generation for June increased by 5.8% from May levels – corrected for the decreased days in the month, and reduced roof-top solar output, this amounts to a significant increase in demand as we move into the cooler winter months and increasing heating loads.
Gas generation increased significantly again in June along with smaller increases in Coal and Hydro generation. Grid scale Solar and Wind were the only major “fuels” to reduce generation over the month.
Gas Generation
Gas generation increased again in June - up 38% from May levels. Compared to 12 months ago gas generation was 73% more than it was in June 2023.
By State, gas generation changes were all positive. TAS increased over 100% on the back of the first serious running of Tamar Valley CCGT in 5 years. NSW was up 61%, VIC 43%, while QLD increased 31%. SA increased the least – up 21%
Hydro Generation
Hydro generation increased 6% in June compared to May 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 drop through most of June until some significant inflows at the end of the month pushed storage up. Storage ended the month at 4,549GWh (31.5% full), an increase of 119GWh over the month. This is 22% less than at the same time last year and is now 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 June. Snowy finished the month 49% of full (2,616Gl) – down 4% over the month. Levels remain well above the 9-year average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
While recent conditions in the east have been dry and cool for the last month, for July to September:
- warmer than average days and nights are very likely across Australia, with an increased chance of unusually warm days and nights
- rainfall is likely to be within the typical range for the season for eastern, northern and western Australia
- above average rainfall is likely for central parts of Australia and isolated parts of southern coastal NSW, but below average for parts of Tasmania.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in June was 4,098GWh – the lowest level since May 2022. It was down 9% on last month and 17% on June 2023. Wind generation was down 2% on May levels but down 36% compared to June last year. Utility Scale Solar generation was also down 12% from May levels but up 16% 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 May, in most States, across all calendar years.
In NSW CAL25 was down 7% at $127, CAL26 was also down 7% at $127.5, while CAL27 closed at $130 - down 5% over the month.
Calendar Year Contracts for New South Wales
QLD prices for CY 2025 had a 2% decrease to $109. CAL26 decreased 3% closing at $103, while CAL27 finished down 4% at $99.
Calendar Year Contracts for Queensland
VIC futures prices for CAL25 closed up 1% at $82.5, CAL26 was down 4% at $75 while CAL27 was down 4% 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 at $15.56/GJ – up 14% from last month. Forecast prices for 2024 increased to $14.95 – up 1% compared to May. Forecast prices for 2025 were also up marginally at $16.57/GJ.
Domestic spot gas prices increased markedly through June. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $15.4/GJ, a 17% increase from May levels. This is above the regulated gas price cap of $12/GJ and close to the LNG netback price. Prices are 29% above what they were the same time last year.
Gas storage at the key Iona storage facility fell sharply again at the start of the month leading to AEMO releasing a warning of gas supply risks across southeastern Australia. Longford gas plant returned from an outage contributing to a flattening off in storage in the second half of June. Storage ended the month at 15PJ – a 29% decrease over the month. Storage is now close to the lowest levels we have seen at this time of year for the past 8 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ 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 significant 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. 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 June were down, ending the month at US$132/T – an 8% decrease on the May 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 increase, VEECs dropped back 12% to close just above the $100 mark at $102. ESC’s also fell – down 6% at $18.5. Other certificate prices were largely flat. Spot LGCs and ACCUs both increased marginally to $46.25 and $33.75 respectively. STCs were unchanged at $39.9.
Future dated LGCs were again down across the board through June. CAL24 was down 1% at $47, CAL25 down 3% at $45, while CAL26 decreased by 12% to $35. CAL27 also decreased by 1% to $33.4 while CAL28 bucked the trend, increasing marginally to $28.85.
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
