Australian Energy Market Summary - September 2021

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The National Electricity Market

Spot prices reduced in all States in September, most significantly in SA and VIC where increased levels of solar and wind generation, and reduced demand, pushed average prices to very low levels. Prices remained elevated in NSW and QLD relative to where they were 12 months ago, contributed to by the on-going outage of a unit at Callide power station and higher fuel costs. The table below shows the average spot prices for the month and also the average peak price. Peak prices were not as divergent from average price this month reflecting reduced price volatility again this month, however the long term trend is increasing volatility, especially with more extreme pricing occurring during morning and evening peak periods. 

The following graph shows the daily Average Spot Price for the last 6 months, with the current month highlighted for clarity. The decrease in spot prices in all States in August and September relative to the previous few months is clear to see.

Source: AEMO

Electricity Generation Mix

Total grid-scale generation for September decreased by 10.1% from August levels due to less days in the month, milder weather across Eastern States as we moved into spring, more roof-top solar generation from longer days, and reduced demand due to Covid lockdowns.

All major fuels apart from utility scale solar were down on the previous month. Solar output increased by 14% as over 1,000MW of new utility scale solar generation is currently being commissioned across the NEM, and we had longer, clearer spring days. Wind generation declined 4%. Renewable generation (excluding roof-top solar) made up nearly 30% of the total.

Gas Generation

Gas generation decreased again in September, dropping a further 29% on August levels as lower demand and increased renewable generation pushed back the need for as much gas. Compare to September 2020, gas usage was 15% higher mainly driven by greater gas use in QLD, replacing unavailable coal, than a year earlier. Gas generation decreased compared to August in all States apart from NSW (58% increase) and TAS which had no gas usage in August. September decreases by State were QLD (-29%), VIC (-72%) and SA (-27%). 

Hydro Generation

Hydro generation decreased in September but remained close to the 5 year average as shown in the following chart.

Water storage levels in Hydro Tasmania’s system continued to rise through September with sustained high inflows into the catchment areas. Storage at the end of the month finished at 7,137GWh (49.4% full), an increase of 523GWh over the month. This is now 18% more than the same time last year and well above the 5 year average as shown in the following chart.

Snowy Hydro’s storage levels increased again during September. Snowy finished the month 43% of full (2,270Gl), up 6% over the month. Levels are now only 2% below the 5 year average and well above minimum levels seen in the last 5 years.

Climate outlook overview (from BOM)

October to December rainfall is likely to be above median for most of Australia, with below median rainfall likely for western Tasmania.

Maximum temperatures for October to December are likely to be above median for the far north of Australia extending down western WA, and far south-east Australia. Below median daytime temperatures are more likely for much of the area surrounding the Great Australian Bight, and also parts of eastern Australia.

Above median minimum temperatures for October to December are likely for almost all of Australia, except for parts of south-eastern WA, where the chances of warmer or cooler than median nights are roughly equal.

The El Niño–Southern Oscillation is neutral, with cooling of the tropical Pacific towards La Niña levels likely in the coming months. This may be increasing the chances of above average rainfall for much of eastern and northern Australia. The negative Indian Ocean Dipole has weakened, but the residual pattern in the Indian Ocean typically favours above average rainfall for parts of Australia.

New Renewable Generation

Renewable generation (wind and solar, including roof-top solar) increased to a new record level in September of 4,392GWh beating the previous record of 4,265 set in January this year. Overall renewable generation was 6.7% more than in August, and close to 16% more than September 2020. Solar generation is booming with both roof-top and utility scale solar each up 30% on a year ago, while wind generation is up 4% in the same time. The following chart shows the monthly energy produced for each of these renewable types since 2017. As we move into the sunnier / windier spring months, we would expect to see more new records being set in total renewable generation in the coming months.

The Electricity Futures Market

CY22 contract prices increased sharply in QLD when it was announced that Callide B would not return to service until 1st Feb 2023 – a 2 month delay during the typically highest demand, summer period. This impacted on both CY22 and CY23 prices for QLD. SA and VIC prices declined over the month while NSW remained static at higher levels than the other States.

CY23 showed an uptick in prices in NSW as well as QLD, while VIC and SA softened slightly. CY24 contracts showed a similar trend to CY23 which possibly reflects some nervousness from traders about whether Callide B will even be back by the end of 2023.

The greater risk assigned to NSW is clearly seen in all years with prices about $10 -15/MWh higher than all other States, though QLD has narrowed the gap in CY2022.

Contracts for the 2022 Calendar Year (CY22)

Contracts for the 2023 Calendar Year (CY23)
Contracts for the 2024 Calendar Year (CY24)

The Gas Market

Global energy prices were the big news story in September. Lack of gas storage / supply in Europe leading into their winter has increased demand for LNG. However Asian markets have been outbidding them for scarce supply, meaning that there is the real potential of energy supply shortages in Europe over the winter. LNG netback prices increased again in September, ending the month at $22.18/GJ – an extraordinary increase of 50% on last month! Prices are now more than ten times the Covid induced lows of the middle of 2020. The futures market also rose sharply with average prices for the rest of 2021 approaching $40 (compared to $21 – 24/GJ last month) and nearly $23/GJ in 2022 (compared to $15.5/GJ last month).

Domestic gas prices have not yet reflected what is happening globally. Spot prices did increase by 12% during September to $8.5/GJ but this level is effectively at a 60% discount to LNG netback pricing. If the LNG netback price remain elevated as expected we would expect this to eventually flow through to the domestic gas and electricity markets.

Gas storage is an important factor in the gas market, especially during the colder winter months in the southern States. The main storage facility at Iona increased slightly during September with lower gas demand. It ended the month at 11.7 PJ – a 4% increase. Storage is now back within a range that would normally be expected this time of year.

The Coal Market

The global energy crisis has been almost as much about coal as it has gas. Thermal coal prices have hit record levels of $228USD/T – a 30% increase during September, following on from a 25% increase the month before. The post Covid world economic rebound has fuelled demand for coal at the same time as supply has been reduced by a mixture of Covid mine restrictions, transportation bottlenecks, and reduced investment, which in turn has been impacted by environmental investment decisions. Countries like India and China, because of the high prices, are now trying to curb coal use, impacting on demand for gas as a substitute fuel, and on reduced electricity generation – forcing major users such as aluminium smelters to reduce production.

The following graph shows international prices for thermal coal over the last 10 years. Prices have almost trebled in 2021.

Like gas, the price of coal can flow through and have an impact on the electricity market. Coal, especially black coal, is often the marginal generator in a number of States so we would expect these high coal prices to eventually flow through to Australian domestic electricity prices.

Environmental Certificates

The following graph shows environmental certificate spot prices over the last 12 months.

During September VEEC prices continued to climb, ending the month at $78.95/certificate – up almost 9% over the month, and 130% on a year earlier.

ESC prices eased slightly to $38.1 – down $0.3 over the month. 

LGCs for all periods jumped up during September. Spot LGCs increased $5.65 over the month to close at $40.40. Calendar 2021 also grew strongly finishing at $41, up $6.25 on the prior month. Calendar 2022 had the largest increase - $9.10 higher at $39.10, while Calendar 2023 closed at $33.50, up $7.25. 2024 certificates gained $5.10 closing at $28.35. Calendar 2025 closed at $20, up $3.75.

STCs eased slightly during the month, closing at $38.75 – down $0.15 on the month.  

This month we have started showing Australian Carbon Credit Unit (ACCU) pricing which has been steadily increasing over the last few month. Currently ACCUs are priced at $26.5 – a 37% increase over the last 3 months.

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.

  • Weather and Climate data – The Bureau of Meteorology publishes a range of weather related information which can be found here:


This document has been prepared for information and explanatory purposes only and is not intended to be relied upon by any person. This document does not form part of any existing or future contract or agreement between us. We make no representation, assurance or guarantee as to the accuracy of information provided. To the maximum extent permitted by law, none of Smart Power Utilities Ltd, its related companies, directors, employees or agents accepts any liability for any loss arising from the use of this document or its contents or otherwise arising out or, or in connection with it. You must not provide this document or any information contained in it to any third party without our prior consent.

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