Jay Ros

As July drew to a close, rays of light penetrated from the 2022 Energy Crisis. Market conditions are easing, but it may be a temporary phase emerging from the winter.

The month of June set new records on all fronts, leading the east coast of Australia energy market into a new paradigm.

The energy market in the NEM has now progressed from extraordinary to crisis, thereby becoming a topic of discussion at Sunday BBQ’s and Board Rooms across Australia.

The Australian east coast energy market has reached an important juncture as the market grapples with the renewable transition and absorbs the global impact of rising energy prices. Origin Energy's CEO Frank Calibri prediction that, “It's going to get messy”, has arrived.

The month of March has been another significant month as Australia has not been immune from the global upward energy price pressures, by experiencing an unparalleled surge in energy costs for the forthcoming Australian winter, which has flowed through to forward prices for the next few years.

February 2022 delivered much stronger electricity spot price outcomes and despite global pressures, steady gas spot prices. Next winter forward electricity prices surged and longer dated forward prices rallied driven by recent trends, the Russian invasion, and early power station retirements.

January 2022 delivered higher electricity and environmental certificate price outcomes in the NEM, while gas remained immune from the upward global LNG price pressure. An usual high level of baseload outages occurred in NSW, and wetter conditions filled the hydro power water storages.

This second part of our Annual Market Report focuses on the Financial aspects of the market by addressing the performance of financial swap and cap derivatives, before assessing environmental certificates. The year of 2021 was a big price mover on all fronts.

Our Annual Market Report has been divided into 3 parts, and this is the first part focusing on Spot Prices. Trends and insights have been drawn, displayed using engaging interactive charts.

The 2021 rollercoaster continues. Following the rally of prices over many months, October prices stabilised, but now November has continued the upward trend.

The month of October was exceptional in so many facets. Australia's long chequered history in developing a federal energy and emissions plan opened another chapter, in preparation for the COP26 Glasgow summit.

The rollercoaster continued during September with skyrocketing gas prices, a rally in LGC prices, and record levels of negative price periods sending wholesale electricity spot prices plummeting.