Aug-20 Energy Market Wrap

Carl Daley -

Following another month of COVID-19 restrictions, the National Electricity Market recorded its lowest August energy consumption since 2006 with just 16.7TWh. Lower demand resulted in softening spot prices across all regions of the NEM, except for NSW. Sunny days and windy conditions led to August rooftop solar PV generation at 978GWh and record monthly wind generation for the NEM at 1,991GWh. High levels of intermittent generation contributed to a high portion of negative price outcomes across the NEM.

Highlights covered in the “At a Glance” section of the report are:

QLD

  1. QLD recorded the lowest August average price in 6 years, at just $30.45/MWh
  2. Record solar PV generation at 375GWh
  3. A record 10% of negative priced half-hour periods
  4. High solar generation pushed half hour scheduled demand below 4,000MW to the lowest level in over 15 years

NSW

  1. Lowest August average spot price in 4 years at just under $50/MWh
  2. Record monthly wind generation of 476GWh
  3. A record August maximum demand of over 12,000MW.
  4. Five NSW wind farms deliver monthly capacity factors exceeding 50%

VIC

  1. Average spot price was 15% lower than previous month, and lowest August in 4 years
  2. Record August maximum demand at 7,828MW
  3. Record monthly wind generation of 691GWh
  4. Lowest average gas price since 2016 at $4.42/GJ

SA

  1. Spot price 23% lower than previous month and lowest for August in 6 years.
  2. High intermittent generation and curtailment of utility solar generation.

TAS

  1. Tas Hydro pulls back hydro generation as storage levels drop
  2. High levels of intermittent generation and volatile spot prices

Gas Market

The east coast gas market saw only a marginal increases in average gas prices for NSW and QLD, with a slight softening of prices in SA and VIC. LNG Exports were at the lowest level in over two years with just 1.67m tonnes shipped.

Electricity Forward Market

There was significant movement in the electricity forward market during August. QLD’s Cal-21 forward price increased by $2.48/MWh but continues to offer the cheapest power in the NEM. TAS increased during August to $57.40/MWh, while SA with the largest decrease of $2.38/MWh to $56.22/MWh.

Special Features

  1. Highlights from AEMO’s 2020 Electricity Statement of Opportunities, the forecasting document that underpins many of the assumptions for the ISP.
  2. Our baseload outages report examines the reliability of the NEM’s ageing coal- fired generator fleet.

Market News

News items for this month relate to:

  1. NSW government planning 15 utility battery projects
  2. ACCC netback price review reveals overpriced domestic gas
  3. The planned Shoalhaven expansion is shelved by Origin
  4. AGL and Origin show interest in purchase of Click Energy, with AGL making the acquisition
  5. 200MW Sunraysia Solar Farm in NSW delayed by legal battle
  6. Renewable developers get cold feet due to increasing market challenges
  7. QLD Labor moves scrap feasibility study for coal fired power