The National Electricity Market
Wholesale electricity prices in September crashed with reduced demand and increasing renewable generation seeing significant periods of negative pricing in all States, but particularly in the Southern States. Over the month on average VIC prices reduced the most – 88% to $17/MWh. TAS was not far behind, down 83% at $22.5, while NSW and QLD were both down about 65% at $58 and $50 respectively. SA had the smallest average falls, decreasing 46% to $80. SA’s higher average prices occurred because of a few high price periods when renewables were scarce, and transmission constraints prevented cheaper imports occurring.
Electricity Generation Mix
Total grid-scale generation for September decreased by 8.5% from August levels – a large drop in operational demand due to warmer weather and the pick-up of roof-top solar output.
Wind, Solar and Hydro generation all increased significantly. This allowed Gas generation to reduce - 56% down on August, while coal was also down 10%.
Gas Generation
Gas generation decreased in September - down 56% from August levels.Compared to 12 months ago gas generation was 13% less than it was in September 2023.
By State, gas generation changes were all strongly negative. The biggest falls were TAS, which decreased 99%, while VIC dropped 88%. NSW has a 65% decline, while SA fell 53%. The smallest drop occurred in QLD with a 36% fall.
Hydro Generation
Hydro generation increased 4% in September compared to August levels, approaching average levels seen in the last 9-years, for this time of year, as shown below.
Storage in Hydro Tasmania’s lakes increased again through September. Storage ended the month at 6,894GWh (48% full), an increase of 864GWh over the month. This is now close to last year’s level and close to the maximum level seen in the last 9 years, as shown in the following chart.
Snowy Hydro’s storage increased during September. Snowy finished the month 50% of full (2,637Gl) – a 5% increase over the month. Levels remain 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 October to December shows:
- Above average rainfall is likely across much of the western half of Australia.
- Rainfall is likely to be within the typical seasonal range for much of eastern Australia.
Warmer than average days and nights are likely to very likely across most of Australia.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in September approached record levels at 6,445GWh – 10% up on August and 13% more than the same month last year. Wind generation increased 3% from already high levels and was up 34% compared to September last year. Utility Scale Solar generation was up 2% from August levels but down 13% 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 foreach of these renewable types since 2017.
The Electricity Futures Market
Futures prices were flat or increased slightly through September across all calendar years.
In NSW CAL25 was flat at $117/MWh, CAL26 was up 2% at $118, while CAL27 closed at $119 - up 3%over the month.
QLD prices for CY 2025 were flat at $102. CAL26 increased 2% closing at $98, while CAL27 finished up 1% at $93.
VIC futures prices for CAL25 closed up 1.5% at $73, CAL26 was up 1% at $69, while CAL27 bucked the trend, down 2% at $66.
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.
The Gas Market
Internationally, LNG netback prices ended the month up at $17.34/GJ – up 6.5% from last month.Forecast prices for 2024 decreased to $15.04 – down 2% compared to August. Forecast prices for 2025 were down 6.5% at $16.81/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 September. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $12.1/GJ, a 9.5% decrease from August levels. This is now well below the LNG netback price. Prices are 30% above what they were the same time last year.
Gas storage at the keyIona storage facility was relatively constant through September. Storage rose to 12.9PJ in the middle of the month before falling back to 12.4PJ at the end of September – a 4% increase over the month. Storage is now close to “normal” levels we have seen at this time of year for the past 8 years.
LPG is an important fuel formany large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ 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. While volatile during the month the exchange rate ended the month at about the same level that it started it
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 September were largely flat, ending the month at US$145/T – a 1% increase on the August 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 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.
After the 20% fall last month, ESC’s stabilised somewhat at $13.25 per certificate –down a further 4%. Spot LGCs also fell by 7% to $41.5. VEECs and STCs were unchanged at $108 and $39.9 respectively. ACCUs increased 3% to $36.25.
Future dated LGCs reduced in all years except Cal 28 through September. CAL24 was down 4% at $41.75, CAL25 down 6% at $41.75, while CAL26 decreased by 9% to $32.25. CAL27 decreased by 12% to $26.8 while CAL28 bucked the trend, increasing 1% to $25.6.
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 informationwhich 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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