Jun-23 Energy Market Report

Jay Ros -

The forward market for the last financial year was a buyers market prior to July 2022, as the spot price exceeded the trade weighted average price by between $48/MWh and $78/MWh for each mainland Region.

The second quarter of 2023 (Q2-23) switched and became a sellers market. The traded weighted average swap price was above the actual spot price in NSW, QLD and VIC; but SA was the reverse. The cap payouts also exhibited the same pattern as the swap market.

The month of June led to the highest wind generation in history and was a contributor to low spot prices along with soft gas prices at times. Gas Powered Generation delivered half the energy as June last year, also putting less pressure on gas supplies. For the first time, the wind sector market share exceeded Brown Coal and became the second largest contributor following Black Coal.

1.0 Overview

This Overview covers the highlights and presents a summary of the dynamics of spot electricity and gas with Variable Renewable Energy.

1.1 Highlights

The highlights for the months are:

  1. Average financial year spot prices for FY-22/23 year were the highest on record for NSW, VIC, SA and TAS, and the second highest for QLD. The final average spot prices were QLD and NSW both at $144.96/MWh, VIC at $100.20/MWh, SA at $123.25/MWh and TAS at $111.98/MWh
  2. June spot prices were the lowest June in all Regions since 2020
  3. NSW had the maximum June average at $105.20/MWh closely followed by QLD at $101.62/MWh. SA average price was in the middle of the pack at $85.69/MWh while VIC finished at $54.53/MWh. TAS was very soft at $38.04/MWh driven by the record high proportion of June Tasmanian negative prices.
  4. SA had the most volatile June behaviour with prices above $300/MWh contributing over $28/MWh to the monthly average of $85/MWh and then prices below zero representing negative $9.29/MWh
  5. For June, Vic and SA had an exceptionally high proportion of negative prices with 18.2% and 21.4% respectively
  6. The $300/MWh price alerts for the NEM was only 104 events for Jun-23, the lowest level since Sep-21
  7. Total energy consumption for June was lower than the same time last year, but maximum demand exceeded last year levels in NSW, SA and marginally, VIC
  8. The month of June average temperature was generally above average levels consistent with the prediction by the BoM that a mild winter is more likely
  9. Two power stations joined the NEM this month, these being Wyalong SF and Darlington Point Energy Storage System
  10. The annual performance of the wind and solar farms has been measured for the FY-22/23
  11. NSW base load outages for June, were well down on last year
  12. Tarong Unit 1 remains the longest operational unit at 1,067 consecutive days as 30 June
  13. Wind and solar curtailment was higher for the southern States
  14. Hydro storage levels are high for this time of year
  15. Forward power prices softened during the month
  16. Monthly Ancillary Service costs were the lowest for many years
  17. Average spot gas prices were circa $12/GJ
  18. Forward gas prices slightly increased and ACCC LNG forward prices substantially increased
  19. Iona Gas Storage remains at record levels
  20. Spot LGC prices softened during the month and the forward LGC prices softened for Cal-24, was unchanged for Cal-25 and increased for Cal-26