The Futures market remains very high this month, finishing the month higher than the prices throughout June and July during the energy crisis and market suspension. Despite this, the spot market has been more stable and the extreme volatility seen during recent months has lessened significantly. With warmer temperatures, spot prices are regularly going negative in the middle of the day across a number of states with lower demand helping to reduce the average wholesale prices. Gas prices have also remained at or below $20/GJ for the past couple of weeks, and the Federal resources minister has recently made a deal with large gas producers to ensure domestic supply and avoid the threat of a gas shortage. It is likely that the greater stability in spot prices, lower volatility in the market and lower gas prices are some reasons that contract prices have reduced slightly from the June/July period, despite the increase in Futures prices. Overall, the situation remains challenging for energy users renegotiating electricity and gas contracts, however there are various contracting options available to manage risk and lessen the impact of higher prices.
- After days of negotiation the resources minister has made an agreement with gas producers for enough gas to be offered to Australian businesses at prices no higher than export customers, along with new quarterly compliance reporting. AFR
- This has prevented the triggering of the domestic gas supply mechanism which would have imposed tougher restrictions on exports of LNG to prevent a domestic gas shortfall.
- Labor’s 43% emissions reduction by 2030 target has been legislated after passing the Senate with support from the Greens and key independents. Australian Government
- The energy transition is speeding up with announcements from the Queensland government aiming to end their reliance on coal power and achieve 80% renewables by 2035, and from AGL bringing forward the closure of their largest coal generator, Loy Yang, by a decade to 2035. RenewEconomy
- AGL is some some criticism for a perceived lack of planning to adequately fund new investment in renewables, and for the lack of strategic direction of the company. AFR
- The European energy crisis is continuing as underwater explosions caused gas leaks in the Nord Stream pipeline from Russia to Germany. This comes amid concerns Russia will stop all gas flows to Europe unless sanctions are lifted. AFR
Renewable Energy News
- A new minimum demand record for the NEM was achieved on Sunday 25th September, as a result of low demand from mild temperatures and high rooftop solar generation, which was contributing 42% of demand at the time. WattClarity
- Minimum demand records were also set for state demand in NSW and Vic. WattClarity
- Five pumped hydro projects promising a combined energy storage capacity of up to 60 hours have been given financial support by the New South Wales government. RenewEconomy
- Victoria has announced a state energy storage target of 6.3 GW by 2035. AFR
- To meet the target spending has been announced for a big battery and grid forming inverter, as well as two bioenergy projects and a hydrogen electrolyser.