Jul-20 Energy Market Wrap

Carl Daley -

We hope you, your business and families are fairing well as we complete another month living with COVID-19, especially those in lockdown.

As shown in the Special Features section of our report, COVID-19 lockdown measures continue to effect demand in various ways across the country, but despite the drop in productivity in many areas, electricity demand was the same or higher across the NEM during July, with SA and VIC both showing the highest energy consumption since 2015. Similarly, average spot prices rallied strongly across the NEM from the previous month’s record lows but were still the lowest for July in many years for most regions.

Market highlights covered in the “At a Glance” section of the report were:

QLD

  1. Lowest July power prices in 6 years
  2. Highest baseload outages for the year with around 2000MW out during July
  3. Highest monthly gas generation since 2018.

NSW

  1. Lowest July power price in 5 years
  2. Historically low baseload outages results in high black coal generation
  3. Second highest monthly generation on record after January 2019 heatwave.

VIC

  1. Softest July power prices in 5 years
  2. Highest monthly demand since July 2015
  3. Second highest outages for the year with 1000MW out during July
  4. Cal-21 Forward Market Prices rallied during July, while Cal-22 and Cal-23 remained flat. The other states followed a similar trend.

SA

  1. Softest July power prices in 5 years
  2. Highest energy consumptions since December 2015
  3. Record monthly gas-fired generation

TAS

  1. Power price increases 50% over previous month and 100% over April’s record low of $23.37/MWh.
  2. Gordon Power Station runs hard and begins generating surplus LGCs.

Gas Market

LNG Exports during July were the lowest level since July 2018, and potentially could have been the lowest in more than four years if it weren’t for the first shipment of LNG to Chile from Gladstone.

Special Features

  1. A summary of the key findings of the AER’s 2020 State of the Energy Market report.
  2. A look at historical trends in intraday price profiles across the NEM.
  3. Review of changing Network Tariff Time-of-Use definitions in QLD and SA.
  4. A summary of recent write-downs on LNG investments.
  5. An update on COVID-19 impact on demand across the NEM.

Market News

News items for this month relate to:

  1. Registration granted to the 275MW extension of the NSW Limondale Solar Farm.
  2. The Federal Government approved Jim’s Plains Wind and Solar project in TAS.
  3. The AEMC announced further delays to the proposed rule changes for 5-minute settlements and global settlements for the NEM.
  4. The first turbine for the 312MW Moorabool Wind Farm in western Victoria connected to the grid.
  5. The proposed Australian-ASEAN Power Link which plans to export energy from a 10GW solar farm near Tennant Creek to Singapore via an undersea cable was granted Major Project Status by the Australian Federal Government.
  6. UAC Energy to remain substantial holder of Infigen shares and prevent a takeover bid from Iberdrola who has secured 40.98 per cent of shares.
  7. AEMO has release its Final 2020 Integrated System Plan, which has changed substantially from its draft assumptions. The final version includes a considerable increase in large scale battery storage and has also dubbed the Marinus Link as priority project and therefore increase the likelihood of Tasmania’s “Battery of the Nation” project.