Futures prices have remained excessively high this month in NSW and QLD, from a combination of drivers including the continuing conflict in Ukraine and Russian sanctions, high commodity and gas prices, coal closures and unplanned outages. Despite this there was an easing of the rapid upward trend of the last few months, and prices ended the month relatively stable compared to the beginning of the month in NSW, QLD and SA. Prices in Victoria have continued rising, but still remain the lowest of all the states. Prices have been rising to historically high levels so some easing of the upwards trend was expected, however the continuing global energy crisis means there is no clear downward trend occurring at this stage.
This month has also seen a dramatic rise in spot prices in NSW and QLD, with prices sitting above $100/MWh and regularly reaching $300 or above (prices above this are considered volatile). There are a number of factors influencing the high prices including coal generator outages, high international coal and gas prices affecting domestic prices, and volatility caused by tight supply and demand balance and interconnector constraints.
The upcoming Federal election is likely to affect long term energy market pressures given the differing energy policy focus of the two major parties, but is unlikely to create any significant immediate response. Despite some reduced solar output due to the recent rainfall, renewably sourced electricity is performing well in the current market, and there is an obvious price gap between states with higher renewable generation (SA and VIC) and NSW and QLD which have a higher reliance on coal generation.
- Loy Yang power station in Victoria suffered an electrical fault on April 15th , causing an outage of the 550 unit 2 which could remain offline until August.
- This is the second time in 3 years the unit has been shut down, with a similar incident occurring in 2019, and comes amid growing concern about unscheduled outages of aging thermal generation. AFR
- The IPCC has released the Working Group III report for their latest assessment cycle, focusing on climate change mitigation and the global progress on emission reduction efforts. If the world remains on its current track, global average temperatures are projected to rise 3.2 degrees Celsius above pre-industrial levels by the end of the century, well above Paris commitments to limit warming to below 2 degrees.
- to keep warming to within 1.5 degrees, global emissions would need to peak by 2025 and be cut by at least 43 per cent by 2030. It would also require net zero emissions to be achieved globally by the 2050s.
- International coal and gas prices are currently the highest they have been in over a decade, due to skyrocketing demand as Russian sanctions continue and Russia has stopped supplying gas to certain European countries. Coal prices Gas prices
Renewable Energy News
- An area off the Victorian Gippsland coast has been designated the first priority area for offshore wind projects by the federal government. RenewEconomy
- Transmission company AusNet has proposed Australia’s first industry led Renewable Energy Zone for Victoria, with an anticipated capacity of 10 GW. RenewEconomy
- Both South Australia and Victoria reached record instantaneous renewable energy share on Easter Sunday, recording 136.2% and 83.8% respectively.
- South Australia’s record was reached at 4:30 am, when the renewables share was entirely made up of wind power. RenewEconomy