Futures electricity prices for Cal 2023, 2024 and 2025 have continued rising significantly for all NEM states this month (most dramatically for NSW). There is significant variation in prices between the states: for 2023 futures NSW is currently at $128.35/MWh, followed by QLD with $102.80/MWh, SA at $76.89/MWh and VIC at $59.37/MWh. Continuing pressure is coming from high global coal, oil and gas prices exacerbated by the Russian invasion of Ukraine.
The BOM is predicting a very low chance of low temperature extremes for winter which should help to ease demand side pressure, however it is difficult to predict how long the geopolitical uncertainty will affect the Australian energy market.
Closer to home, the upcoming Federal election could provide impetus toward energy policy if a change in Government occurs.
- The federal budget released on Tuesday evening (29/3) contained $1.3 billion to increase gas supply and $250 million investment in lower emission technologies including hydrogen. However, there will be no new spending on renewable energy projects, and funding will be cut for the Clean Energy Finance Corporation and the Australian Renewable Energy Agency which support investment in renewable energy, creating doubt about the government’s commitment to reach net zero by 2050.
- Queensland reached a new all-time record demand on Tuesday 8th March, and prices remained above $1,000/MWh for almost 3 hours as a result of extremely tight supply and demand balance. WattClarity
- The former head of the government’s emissions reduction assurance committee has slammed Australia’s carbon credit scheme, saying that most of the credits approved did not represent real or new emissions cuts. Guardian
- For example credits have been provided for projects that “avoided deforestation” in areas that were never going to be cleared, reforestation and claiming credits for trees which are already mature, and for landfill gas capturing projects which were economically viable and would have happened without the revenue from carbon credits.
- AEMO has released their Gas Statement of Opportunities for 2022, which outlines that the role of natural gas in Australia’s energy market is uncertain due to electrification and decarbonization of the energy system. AFR
- Under extreme conditions there could be a gas shortfall in the eastern states in winter 2023.
- The media release states that “Increasing ‘peakiness’ of gas demand is likely to require flexible solutions that support high, but infrequent, gas demand.”
Renewable Energy News
- The Victorian government has set an ambitious plan to install 9GW of offshore wind by 2040, with an interim target of 2GW by 2032. AFR
- AGL has received approval for a 500MW battery with storage duration of up to 4 hours, at the site of the Liddell power station. RenewEconomy
- The federal government has received interest proposals of 8 times more than the targeted 700MW capacity for the proposed NSW green hydrogen hub in the Hunter and Illawarra regions. AFR
- This is part of the state’s plan to become a global leader in clean fuels, and $70 million in grants has been promised to develop the hydrogen hub.
- A new Australian start-up is proposing to use disused mine shafts for gravity energy storage. Up to 175 suitable mine shafts have been identified, with an energy capacity of 3GWh. RenewEconomy
- Gravity energy storage works by using large solid weights, which are raised when energy is cheap or in excess and then lowered to generate electricity when needed.