Market changes in May
Australia’s electricity grid survived the second-hottest summer on record without load-shedding blackouts, despite the closure of a major coal-fired power station in Victoria.
Recently, the market had settled down since the gigantic hike in 2017 due to closure of Hazelwood coal fired generator in Victoria. Hazelwood’s closure in March 2017 saw 1,600 megawatts of power supply capacity (more than half SA’s peak demand) sucked out of the national grid.
But when supply tightened, other power stations helped fill the void. Gas-fired power stations in SA, Victoria and Queensland were brought out of mothballs, adding 83 megawatts of additional capacity. There was also a big reduction in the number of unplanned outages on transmission lines, making it easier for the market operator to make sure power was where it need to be when we needed it most.
Although prices have been trending downwards in all states for May 2018 as seen on the charts in this report (Table: A), the volatility still remains within the market.
Electricity Trading Summary For The Week Ending Monday: 28/05/2018
The market was slightly lower over the week in Calendar 2019. NSW dropped $0.51 to $70.21, VIC dropped $0.67 to $76.03, QLD lost $1.39 to $63.58 and SA increased by $0.20 to $87.98.
The spot quarter was mostly up last week. NSW gained $2.00 to $76, VIC fell $0.50 to $78.00, QLD increased by $0.50 to $64.50 but SA remained unchanged at $94.37.
Looking forward to Q3 2018, prices were mainly up. NSW increased $0.65 to $76.00, VIC dropped $0.20 to $78.10, QLD increased $0.35 to $67.75 and SA increased $0.25 to $87.00.
Factors to watch for Q2 2018 per state:
QLD: Expecting significant solar PV to come on line in the second quarter of 2018. Spot prices in the middle of the day are expected to be lower when solar generation is at its highest.
NSW: There is more than 650MW of new wind power in coming months. This increase in renewables is expected to lend to lower average spot price outcomes in the future.
VIC: With a tighter supply/demand balance, the performance of remaining brown-coal generators will be a key influence on spot price levels.
SA: New renewable projects are expected to see an additional 210MW of wind and 220MW of solar capacity during 2018.
Current news on electricity market:
Energy Company AGL has knocked back an unsolicited offer for its ageing Liddell coal-fired power plant in the New South Wales Hunter Valley.
Whyalla steelworkers boss Sanjeev Gupta, who wants to turn his company GFG Alliance into one of the nation’s biggest energy providers.