Market Changes in July 2018
The electricity market has been steady during the start of the month however, there was an upward movement towards the end of the month across all states. This is due to strong spot pricing and increase demand for electricity.
Pricing was declining towards the end of the financial year however, it has started to incline. As can be seen in the below charts, rates have moderated in most states in 2020 and 2021. The Government’s National Energy Guarantee has started to impact on large users in Australia. This has been introduced in an effort to manage the electricity network and mitigate the need for load shedding in times of peak demand. It remains to be seen if these changes will assist to reduce costs for large electricity users especially those in regional areas.
Large electricity users will need to meticulously monitor the market prior to entering in order to secure a competitive contract for the renewals.
Electricity Trading Summary for the Week Ending Friday: 30/07/2018
The market trended up in Calendar 2019 in all states. NSW increased by 13.08% to $77.25, VIC went up by 16.88% to $84.58, QLD was up by 11.87% to $66.25 and SA increased by 7.50% to $92.25.
National Energy Guarantee
The final report from the Energy Security Board on the Turnbull government’s signature energy policy does not contain detailed modelling the states were awaiting, an absence that could further complicate approval on the plan.
Among the additional details provided by the board to states and territory governments from an initial paper sent a week earlier is the estimate that the share of renewable energy in the National Electricity Market will rise from 17 per cent in 2017-18 to 35 per cent in 2029-30. That outcome, though, is lower than the 46 per cent base case projected by the Australian Energy Market Operator in a separate report released last month.
The state and territories, which must provide unanimous support for the National Energy Guarantee for it to proceed, received the extended final detailed design paper by the board on Wednesday. The 61-page document does not contain more detail on the guarantee’s workings, including the role of different sources of energy if the plan was to be implemented after 2020.
Coal powered generation is expected to continue to account for more than 60 per cent of all generation in 2029-30. There is no further closure of coal-fired power stations, except for AGL’s Liddell plant in NSW, up until 2029. Some Queensland black coal generation is projected to withdraw “in line with key contracting and technical milestones” around 2029-30.
Australia pledged to cut national emissions at 2005 levels by 26-28 per cent by 203. Under the energy policy, emissions are supposed to fall by a “pro-rata” of 26 per cent.
The ACCC’s recommendations to significantly improve electricity affordability for Australian consumers and businesses are outlined in its final Retail Electricity Pricing Inquiry report. The Inquiry, which commenced in March 2017, began by identifying the root causes of high electricity prices across the entire electricity supply chain and has now made 56 recommendations detailing ways to fix the National Electricity Market.