The National Electricity Market
January saw significant increases in the wholesale spot prices in northern States with several high price events driving average prices up, while southern States experienced reductions on already low prices. QLD had the largest increase, up 73% to $160/MWh. NSW increased 19% to $81/MWh. TAS prices fell 4% to $50/MWh, while VIC prices dropped 13% to $22/MWh and SA prices fell 14% to $33/MWh
Electricity Generation Mix
Total grid-scale generation for January increased by 4.8% from December levels - a significant overall increase. Warmer weather as we headed into the hottest summer months will have contributed to this increase.
Hydro generation was down significantly from December levels. Additional coal largely contributed to the overall increase in generation.
Gas Generation
Gas generation increased slightly in January - up 1% from December levels. Compared to 12 months ago gas generation was 1% lower than it was in January 2023.
By State gas generation changes were mixed. NSW decreased another 59% from last month’s level, while VIC fell 71% and SA 2%. QLD gas generation increased 20% while TAS increased 78% (on very small numbers).
Hydro Generation
Hydro generation decreased 10% in January compared to December levels and was approaching the 9-year low as shown below.
Storage in Hydro Tasmania’s lakes reduced through January. Storage ended the month at 6,064GWh (42% full), a decrease of 236GWh over the month. This is 3% more than at the same time last year and still well above the average level for this time of year as shown in the following chart.
Snowy Hydro’s storage decreased slightly during January. Snowy finished the month 61% of full (3,226Gl) – down 0.2% over the month. Levels remain well above average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
February rainfall is likely to be below median for most of Australia; February to April rainfall is likely to be below median for northern Australia.
February to April maximum and minimum temperatures are likely to be above median for most of Australia.
February to April maximum temperatures are at least 4 times more likely than normal to be unusually high for north-western Australia, with minimum temperatures 4 times more likely than normal north of the Tropic of Capricorn.
The long-range forecast is influenced by several factors, including record warm oceans globally and El Niño.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in January was 6,445GWh – down 2.4% on last months record level and 11% up on January 2023. Wind generation was down 2% on December but up 11% compared to January last year. Utility Scale Solar generation was up 1% from December levels and up 19% over the same month last year.
The following chart shows the monthly energy produced for each of these renewable types since 2017.
The Electricity Futures Market
NSW prices were relatively flat in January across all calendar years - CAL24 was down 2.5% at $96, CAL25 was up 1% at $104, while CAL26 closed at $112.5 - up 2% over the month. CAL 27 fell 0.5% over the month to $115.
Calendar Year Contracts for New South Wales
QLD prices had similar trends to NSW apart from CY 2024 which had a 7.5% increase to $100. CAL25 increased 3% closing at $92, CAL26 finished up 1% at $90, while CAL 27 was down 0.5% at $88.5.
Calendar Year Contracts for Queensland
VIC futures prices continued the downward trend from last month. CAL24 closed down 14% at $58, CAL25 was down 3% at $66 while CAL26 was down 1.5% closing at $66.5. CAL 27 ended the month trading down 4% at $67.
Calendar Year Contracts for Victoria
SA has less liquidity in the futures markets than other States, so changes tend to be lumpier and less a true reflection of the underlying market. For completeness we have included the graph below.
Calendar Year Contracts for South Australia
The Gas Market
Internationally, LNG netback prices ended the month at $13.95/GJ – down 27% from last month. Forecast prices for 2024 fell again to $13.95 – down another 5% compared to December. Forecast prices for 2025 were also down 3% at $14.5/GJ.
Domestic spot gas prices were flat again through January. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $11.2/GJ, a 0.5% decrease from December levels. This is still below the regulated gas price cap of $12/GJ, and also below the LNG netback price. Prices are 8% below what they were the same time last year.
Gas storage at the key Iona storage facility increased slightly through January. Storage ended the month at 22.06PJ – a 2% increase over the month. Storage remains above the highest we have seen at this time of year for the past 8 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 3 years as well as forecast pricing for the year ahead.
The other main contributing factor to LPG prices in Australia is the exchange rate against the USD. As shown below this has been falling over the last few years adding to domestic LPG prices.
The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in January decreased, ending the month at US$116/T – a 22% drop on the December close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.
High international coal prices continue to be an important driver of high electricity prices especially in the States most reliant on black coal generation – ie QLD and NSW. However, the coal price cap of $AUD125/tonne introduced by Governments in December 2022 is dampening the impact on electricity prices.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 3 years.
Environmental certificates had some reasonable rises and falls through January. VEECs continued their upward march with another 4% increase. They are now sitting not far below $100/certificate. ACCUs also rose 4% to $35. Spot LGCs had a 5% decline in price while ESCs were down 4%. STCs were flat at $39.35.
Future dated LGCs reduced in most years through January. CAL24 fell by 5% to $48, CAL25 dropped 1% at $46.6, while CAL26 also decreased by 1% to $39.5. CAL27 broke the trend, increasing by 6% to $32.75 while CAL28 was reported for the first time at $27.75.
About this Report
This energy market summary report provides information on wholesale price trends for all regions within the National Electricity Market (NEM) and environmental scheme certificates.
Please note that all electricity prices are presented as a $ per MWh price and all certificate prices as a $ per certificate price.
All NEM spot prices are published by the Australian Energy Market Operator (AEMO). Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- NEM Spot market – AEMO publishes a range of detailed information which can be found here: https://aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard
- Weather and Climate data – The Bureau of Meteorology publishes a range of weather related information which can be found here: http://www.bom.gov.au/climate/
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