Carl Daley

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.

The NEM expanded its capacity by 121MW in November. Warm temperatures plus extended baseload outages contributed to tight supply-demand balance, driving exceptional NEM Generator-weighted Average price growth in November, with NSW and QLD leading gains.

High prices persisted in the electricity and gas spot markets during November, with extreme electricity spot prices in QLD and NSW, and surging gas spot prices in the STTM. The NEM survived the hottest November on record, but we aren’t out of the woods yet with a hot summer on the radar.

The NEM expanded its capacity by 167MW in October. While demand remained at historical lows, Generator-weighted Average prices strengthened across most regions. VIC continued to experience persistent negative prices, causing energy flows to shift towards regions with more favourable pricing.

Mild sunny weather led to record low minimum demand for the NEM as well as record lows in VIC and SA. Meanwhile QLD and NSW continued to separate from the rest of the NEM with significantly stronger power spot prices. Gas spot prices continued to rise with average prices around $13/GJ in October.

NEM capacity grew by 340MW in September. Strong winds and mild weather led to lower demand and extensive curtailment, depressing Generator-Weighted Average prices. Many farms increased reliance on Large-scale Generation Certificates for revenue. TAS transitioned from importer to net exporter to VIC.

The NEM Q3 average price finished the highest since the 2022 Energy Crisis despite extremely low September prices for VIC and TAS. In SA, volatile winds drove volatile spot prices, while mild days with high VRE crushed prices in VIC and TAS. Meanwhile, NSW and QLD had above average price levels.