March 2023

Energy Futures rose in all states throughout March, driven by generator outages, interconnector and transmission constraints, news of one of the joint owners of Callide Power Station going into voluntary administration, some strong seasonal demand and ongoing discussions around the Safeguard Mechanism and emissions caps. The strong reaction, particularly in the earlier quarters, has likely been exaggerated by the nervousness in the market surrounding the closure of Liddell Power Station in the next couple of weeks. The spot price also increased last month with price spikes occurring in the evening as a result of higher demand and low renewable output, and average spot prices for March were above $100/MWh in NSW and QLD. Due to southern transmission constraints, SA and VIC fared better with spot prices averaging $65 and $62/MWh respectively. It remains to be seen how the market will respond to the closure of Liddell this month, it is likely to depend largely on the stability of other generation and any unexpected news in the energy market.

Recent Highlights

  • Callide C Power Station co-owner Genuity has gone into voluntary administration after Shareholders could not agree on future funding. AFR
    • The Callide power station remains under the operational control of Queensland Government-owned CS Energy, therefore the announcement is unlikely to affect the power station operations.
  • Labour is expected to pass its overhauled legislation for the Safeguard Mechanism after a deal was reached with the Greens to impose an overall cap on emissions produced under the scheme. The changes will come into effect July 2023. ABC
    • Other changes include additional support for industries including steel, cement and aluminium, and the requirement to explain to the Clean Energy regulator if carbon offsets are used for more that 30% of abatement. AFR
    • The Greens claim that the changes could prevent almost half of new fossil fuel projects currently in the pipeline.
  • Brookfield and EIG have signed a binding deal for the $18.7 billion takeover of Origin Energy, after months of talks. AFR

Renewable Energy News

  • The CSIRO have released their Renewable Energy Storage Roadmap, which predicts that by 2050, Concentrated Solar Power will be the cheapest way to store energy for 8–24 hours. ABC, CSIRO
  • Home battery installations jumped 55% in 2022, as energy prices hit record new highs. RenewEconomy

Market Reports