The big market influencer this month has been heightened speculation around a Federal Government announcement of intervention in the energy market. The delayed National Cabinet meeting to discuss possible interventions is due to be held on Friday 9th December with the weight of speculation suggesting that a gas price cap will be implemented, with a possible cap on coal also. There are conflicting opinions among the industry and politicians over the extent of the impact that the proposed measures will have, including unintended consequences on investment and limited impact on the electricity market due to low current levels of gas generation. Regardless, this talk along with good renewable generation and mild demand has driven the market lower with Futures prices having come down from their peak in early October. There is still some volatility in the market with dramatic day to day movements, however a downward trend has been maintained throughout the month. Unfortunately with Christmas and the deadline for 1 January contract transfers fast approaching, we are unlikely to see the intervention come quickly enough for a substantial impact on year end prices.
- A National Cabinet meeting to discuss energy market intervention is due to be held on Friday 9th December. This was delayed after Anthony Albanese was diagnosed with Covid-19. Measures discussed are likely to include a cap on gas prices, a similar coal price cap, tax reform or subsidies for certain industries. ABC
- There is disagreement among between the Federal Government and the NSW and Queensland state governments over a coal price cap, over compensation and whose responsibility it is to implement certain measures. AFR
- Any changes are highly unlikely to occur in time to impact contracts starting January 1 next year.
- The South Australian electricity grid was “islanded” for a week after intense storms brought down a transmission tower on November 12th and caused multiple transmission lines to trip, as well as causing significant damage to local distribution networks. WattClarity
- 160 000 homes and businesses were left without power in the immediate aftermath, with many residents remaining without power for days due to the scale of localised distribution network damage.
- Distributed solar PV was curtailed almost every day while South Australia was islanded to maintain system security. A recently implemented measure called the Remote Disconnection and Reconnection emergency backstop allows AEMO to switch of distributed PV in the state if required to keep the lights on, and all new solar systems are required to have remote control capabilities.
- ElectraNet announced that the transmission tower had been temporarily fixed on Wednesday evening, 23rd November.
- Origin has received a $18.4 billion takeover bid from Brookfield and EIG, who intend to invest $20bn in new renewable and storage assets. AFR
Renewable Energy News
- Andrew Forrest’s Squadron Energy has signed a $4 billion deal to purchase renewables developer CWP Renewables, beating offers from Spanish energy giant Iberdrola, Tilt Renewables, and Origin Energy. RenewEconomy
- The collapse of engineering contractor Clough is threatening delays to a number of projects essential to Australia’s energy transition, including the Project EnergyConnect electricity interconnector between South Australia and NSW, and Snowy 2.0. AFR