Carl Daley

The Q1-25 quarter spot prices finished in the bottom quartile of our spot forecast, creating a significant seller’s margin profit for the quarter. Forward market prices generally rallied during the month, reversing the February downward trend.

In March, 1,147MW of new capacity was connected. QLD was the only region to enjoy an increase in Generator Weighted Average prices, while wind weighted prices fell for all regions. SA solar and wind suffered the most curtailment. VIC was the dominant energy exporter and NSW the largest importer.

The Q1-25 quarter electricity spot prices finished at an unremarkable level, except for Tasmania. Variable Renewable Energy performed strongly, and gas generation was low. Meanwhile, gas spot prices also remained calm, while storage levels were filled, with a falling forward market.

Tasmania’s average spot price for February was the highest in the NEM, despite exceptionally low demand and accounted for almost half of all FCAS cost for the month. East coast gas spot prices remained high at around $13.50/GJ for the DWGM, and $12.50/GJ in Victoria’s STTM.

February brought no new connections to the NEM. Generator-Weighted Average prices improved for solar and wind across most regions, except QLD. Solar and wind farms continued to face large curtailment. VIC was the dominant energy exporter while TAS was the biggest importer in February.

The Q1-25 spot price continues to struggle to meet pre-summer expectations and the forward market has now resigned to this lower level. The lower Q1 prices have led to the FY-25/26 forward prices also softening in the northern States.

January maximum demand levels were low compared to historical levels resulting in relatively soft spot price outcomes, except for brief price volatility in QLD and NSW. High offers from Hydro kept TAS prices around $120/MWh. Gas prices retreated below $14/GJ in following a lengthy rally in Q4-24.

The NEM added 185MW capacity in January. Generator-Weighted Average prices declined for wind and solar farms in most regions, with solar farms facing deeper discounts to Time-Weighted Average prices. Solar curtailment remained high, particularly in SA. QLD's reliance on NSW during peak demand grows.

As we navigate through the summer season, the energy market is displaying several notable trends for Q1-25 as forward prices struggle to be delivered. We check the impact on the upcoming FY-25/26 which is a key component for Regulators setting the forthcoming regulated maximum residential tariffs.

The energy market was under considerable stress during 2024, leading to higher electricity spot prices. The pain was particularly felt towards the north with QLD and NSW recording their second-highest average prices after the 2022 Energy Crisis.