News and Articles

July 2023 Energy Market Insights

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July 2023

July was a relatively quiet month for energy news. Average spot prices for July were lower than June in all NEM states (except for Victoria which was less than $1 higher). There was a large drop in contract prices in the first half of July, and although prices rebounded in the second half of the month they still ended lower than the start of the month. The price increase was impacted by expectations for the development of an El Nino weather pattern, which has been declared by the World Meteorological Organization. The BOM in Australia has stricter criteria and has maintained an El Nino alert status which indicates there is a 70% chance of El Nino occurring (ABC), but regardless there are expectations for a hot, dry summer in Australia which may put pressure on the energy system.

Recent Highlights

  • AEMO has released their quarterly analysis of the energy system and market. Read a summary of the key points here.
  • Climate records have been smashed again this month, with July the hottest month on record and likely the hottest in 120,000 years. This is raising expectations for a hot summer in Australia which will test the energy system, and increasing the attention on decarbonisation.
    • Australia is also experiencing an unusually warm winter, which is helping to take the pressure off electricity prices as heating demand is reduced. ABC
  • The 1320 MW Vales Point Power Station has delayed its closure by four years to 2033, after the new owner determined the plant equipment will last longer than originally expected.
    • There is also increasing expectation that Eraring Power Station will have to operate, at least partially, past its earliest announced closure date of August 2025. AFR
  • Victoria is introducing a ban on gas connections in new homes from next year. AFR

Renewable Energy News

  • Australia’s second offshore wind zone has been official declared off the Hunter and Port Stephens coast, for a capacity of 5 GW. Australian Government¬†
    • The zone was reduced in size from the initial proposal to address community opposition further south and manage ecological concerns.
  • The CSIRO Gencost report has identified that solar and wind remain the cheapest sources of new generation, despite an increase in cost for all sources of generation due to inflation. RenewEconomy
  • Australia’s rolling 12 month renewable energy generation has reached 37%. RenewEconomy

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