The electricity market bucked the trend in August with stronger spot prices and bullish activity in the electricity forward market. Revised ESOO reliability outlooks have seized the market's attention and turned attention to generator and State Government negotiations around retirement dates.
The highlights for the month are:
- Total energy consumption across the NEM was the lowest for August since 1999. Record low Operational Demand for the NEM occurred on Sun 27 Aug of 13,339MW
- The chance of El Niño occurring remains high, with the three-month outlook from the BOM showing a high chance of above-average temperatures with low rainfall
- Spot price volatility increased during August, largely due to highly variable demand, intermittent and inconsistent renewable generation, and curtailment of wind and solar generation
- The ACCC's LNG netback price rose with stronger Asian gas prices
- AMEO's 2023 Electricity Statement of Opportunities reveals concerning reliability gaps and a call to action to speed up the pipeline of new capacity which is experiencing increasing delays
- The likelihood of delays for the closure of Eraring, Loy Yang A and Yallourn has increased as negotiations continue between generators and state governments
- Announcements of cost blowouts for electricity infrastructure projects are grabbing new headlines again
- Alcoa 300MW Aluminium smelter extends its supply agreement beyond 2026
- LGC spot prices softened in August, while the three-month price rally in Victorian VEECs seems to have plateaued just below $90/MWh
