Jul-22 Energy Market Report

During July, the immediate gas shortages led to the triggering of the Gas Supply Guarantee Mechanism. AEMO took measures to free up gas supply which included more gas being pushed from Wallumbilla towards the southern states through the SWQP pipeline, and AEMO directed some Vic gas-fired power stations to not run to preserve gas. A month long outage at Origin Energy's Australia Pacific LNG project facility started which could lead to more gas being available to the domestic market during August. However, Asian netback forward prices remain at about $45/GJ until May-23.

Milder weather during the last few weeks has also seen a fall in demand for both gas and electricity across the NEM. It would seem that we are now well on our way out of winter, bar another cold snap or two. All eyes are on the wholesale electricity forward market, especially those with open positions. Recent downward movements of Cal-23 prices are being observed, especially for the typical leading indicator of Q1.

So-called Global Settlement rule changes will see more costs passed onto some consumers, retailer churn is setting new records, generation offers have significantly moved around, generation curtailment is well down on previous levels,  China LNG exports were the lowest since 2017, meanwhile LGC prices continue to strengthen. Read on for more ...