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October 2023 Energy Market Insights

Aerial view of a modern commercial building with solar panels on the roof, and roads with junction and cars, showcasing renewable energy in urban architecture.

October 2023

By David Bagley-Jones

Throughout October 2023, futures for the calendar years 2024 and 2025 experienced consistent declines across all states. This downward trend was predominantly influenced by mild weather conditions, low spot prices, and the substantial presence of renewable energy. Notably, this occurred despite the persistent threat of an extreme El Niño summer. 

Spot pricing within the National Energy Market recorded a significant surge in negative pricing. This phenomenon was attributed to the escalating output from rooftop solar installations and increased supply from grid-scale solar facilities, leading to substantial reductions in daytime operational demand. 

The wholesale market experienced a notable shift, marked by reduced prices and a decrease in year-on-year demand by at least 5% in each state. This period also highlighted the diminishing role of coal in comparison to the rising prominence of renewable energy sources. 

In the East Coast Gas Market, spot prices reached new lows in early October. Sydney’s Short-Term Trading Market (STTM) plummeted to $5.10/GJ, while Brisbane and Adelaide experienced drops to $5.62 and $6.52, respectively. Spot prices hit a low of $4.42/GJ. Despite a modest beginning to October, prices doubled in most cases as the month progressed. 

To conclude the month, the National Energy Market (NEM) earned the dubious distinction of being recognised as – the most volatile energy market on the planet. Unplanned outages in Australia’s aging coal power plants and extreme weather events contributed to this volatility, as revealed by research from Rystad Energy. 

Looking ahead, the long-term outlook for the energy market remains uncertain. The development of renewable energy sources is not keeping pace with targets and projections indicate an anticipated increase in hot and dry weather, not only in the current year but over the long term. 

Recent Highlights

  • Despite wholesale power prices reaching their lowest levels in two years, consumers are cautioned against expecting immediate relief in their bills. ABC. 
  • Australia’s electricity market “most volatile” in world, as clunky coal clashes with solar. RenewEconomy 
  • Mount Piper coal station’s operations at risk; EnergyAustralia warns amid vulnerable grid. WattClarity 

Renewable Energy News

  • A new instantaneous renewable energy generation record was set on Tuesday 24th October, reaching 72.1% for the first time. AEMO 
    • Generation from rooftop solar supplied 41% of demand at the time. 
    • Generation from Utility-scale Solar supplied 17% 
    • 12% was supplied by wind generation. 

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