Jul-23 Energy Market Report

Jay Ros -

The highlights for the month are:

  1. Matildas are into the semi-finals of the FIFA Women's World Cup ... oops we are meant to be talking about the energy market
  2. The NSW Government review of the Eraring power station scheduled to start in August 2025 is due to be released soon, meanwhile the closure of NSW Vales Point power station has delayed from 2029 to 2033
  3. Stage 1 of Goyder Wind Farm (201MW) in SA came online along with the 50MW Bouldercombe Battery Project in QLD and the 100MW Capital Battery in the NSW region adding to the 770MW of Battery Energy Storage Systems, 374MW of wind and 455MW of solar farms already added this year. Since 2009, more than 8,000MW has been retired
  4. The Labor Federal Government has released the Mandatory Gas Code of Conduct that will be in place until 1 July 2025. Gas spot prices remain around the uncontracted gas cap of $12/GJ
  5. The releasing of the review of Snowy 2.0 has been pushed back
  6. The QLD Government has revealed its draft 2023 Renewable Energy Zone (REZ) Roadmap
  7. Spot electricity prices fail to deliver to forward market predictions as QLD and TAS had the lowest monthly average price since January 2022. Furthermore, TAS monthly average was the lowest July on record, and VIC and SA was the lowest July for 8 and 9 years respectively
  8. For the first time this year, there was no half hour price during the month above $5,000/MWh in any Region, and the proportion of negative spot price increased across the NEM
  9. The month of July was warmer than usual with TAS the warmest July on record, NSW and VIC had the warmest July in 5-years, along with SA and QLD the warmest July in 4-years
  10. Minimum operational demand records were set in VIC, NSW and SA; while QLD was very close. Conversely, VIC set a new maximum operational demand
  11. Generator offers in the spot market have tended to shift capacity into lower price bands
  12. Solar farms had the lowest weighted average price relative to the time weighted average on record in QLD, and NSW the second lowest on record.
  13. Wind farm production was high and when combined with the record May levels, has been a very strong run over the last 2-months, however the wind weighted average prices have softened when compared to the time weighted averages. TAS wind weighted average price was only $13/MWh for the month
  14. Snowy water storage levels are high, and TAS water storages are normal in preparation for a warmer weather outlook. IONA gas storage levels remain at record-high levels
  15. Forward power prices continued to soften during the month, while VIC gas forward prices for Cal-24 strengthened and Cal-25 prices softening thereby converging with Cal-24 levels. LNG netback JKM prices softened
  16. ASX Daily Variation Margin calls during July was higher than June and contained the largest daily margin call since 8 May
  17. LGC and Victorian VEEC prices rallied, and NSW ESC prices softened
  18. Future tariffs for Small Market customers are tracking towards a significant reduction