Jay Ros

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.

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.

Forward electricity contract prices went for a wild ride in Q3-24. Volatile weather played a significant part in driving price outcomes, with strong price rallies in July and August followed by softening prices in September, closing well below market expectations at the beginning of the quarter.

Cold weather and low VRE generation contributed to extreme prices early in August. This was followed by unusually warm temperatures, softening demand, falling gas consumption and softer spot prices driven by record levels of renewable generation.

Electricity spot prices remained high across the NEM in July as very low temperatures drove strong demand. SA experienced extreme price volatility late in the month as cold temperatures coincided with very low wind generation. East Coast gas spot prices also remained high averaging above $13/GJ.

NEM fossil fuel generation ramped up to offset the lowest wind generation for June in seven years. In Tasmania, hydro generation fell to the lowest level since 2009, Tamar Valley fired up for the first time in five years, and energy imports from VIC were the highest for June since 2017.

Electricity and gas spot price volatility intensified in June. The portion of electricity spot prices around $300/MWh swelled pushing average monthly prices beyond $150/MWh. Average daily gas hub prices hit $28/GJ in Sydney and Melbourne after AEMO announced a gas supply risk for the coming months.

There were 861MW of new generation connections in May. Despite rising wind and solar Generator-Weighted-Average prices, most NEM regions continued to have large discounts to their Time-Weighted-Average prices. Additionally, most NEM regions reported lower wind and solar curtailment rates.

May was marked by extreme price volatility in NSW where the CPT was exceeded on 8 May triggering Administered Pricing, while low wind generation contributed to high average spot prices in the southern states despite lower demand levels. Gas spot prices soared averaging above $13/GJ for all regions.

The month of May once again reflected a change in perceptions of the future electricity prices, and continued the history of being the most heavily traded month along with November, each calendar year.

The NEM continues to wait for the first new generation connection for 2024, marking the longest stretch with no new connections since 2018. Wind and solar generators performance fell in April with larger discounts to the spot price. In brighter news, wind and solar curtailment continues to fall.

Spot prices strengthened in April with a very high portion of price outcomes between $100 to $300/MWh pushing the NEM average April price to $85/MWh compared to $75/MWh for Q1-24. Forward prices significantly rallied during the month. Gas spot prices also strengthened but averaged just below $12/GJ.