The National Electricity Market
March saw significant decreases in wholesale spot prices in most States. VIC prices decreased 37% to $52, while NSW and QLD fell by a similar percentage to $70 and $74 respectively. TAS fell by 15% to $70 while SA was the only State to increase – up marginally (2%) to $67.
Electricity Generation Mix
Total grid-scale generation for March increased by 1.5% from February levels – corrected for the increased days in the month, and reduced roof-top solar output, this amounts to a significant reduction in demand. Moving away from the peak summer period, into the shoulder Autumn period will account for most of this reduction.
Increased wind generation more than compensated for the reduced utility solar, while coal increased generation offsetting the reduction in gas and hydro generation.
Gas Generation
Gas generation decreased significantly in March - down 15% from February levels. Compared to 12 months ago gas generation was 35% less than it was in March 2023.
By State, gas generation changes were mixed. SA increased 33% while NSW was up 10%. On the flip side, the largest State for gas use, QLD, dropped 33%, VIC was down 54% and TAS decreased 52% (on very small numbers).
Hydro Generation
Hydro generation decreased 1% in March compared to February levels and was close to the 9-year average as shown below.
Storage in Hydro Tasmania’s lakes continued to reduce through March. Storage ended the month at 5,178GWh (36% full), a decrease of 424GWh over the month. This is 1% less than at the same time last year but remains close to the maximum level seen over the last 9 years, for this time of year, as shown in the following chart.
Snowy Hydro’s storage decreased again during March. Snowy finished the month 56% of full (2,960Gl) – down 5% over the month. Levels remain well above the 9-year average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
May to July maximum temperatures are very likely to be above median for most of Australia.
May to July minimum temperatures are very likely to be above median for most of Australia.
May to July maximum and minimum temperatures have a greater than 50% chance of being unusually warm for most of Australia.
May to July rainfall is likely to very likely to be below median for parts of northern Australia and small areas of the southern mainland.
The long-range forecast is influenced by several factors, including record-warm oceans globally and a decaying El Niño.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in March was 5,934GWh – down 0.8% on last month but 15% up on March 2023. Wind generation was up 10% on February levels and up 11% compared to March last year. Utility Scale Solar generation was down 7% from February levels but up 24% 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
Futures prices were largely flat across NSW and QLD in March across all calendar years, with some more significant increases in VIC.
In NSW CAL24 was down 2% at $90.5, CAL25 was up 2% at $101, while CAL26 closed at $103.5 - down 1.5% over the month. CAL 27 also fell 0.5% over the month to $109.
Calendar Year Contracts for New South Wales
QLD prices for CY 2024 had a 3% decrease to $89. CAL25 increased 0.5% closing at $89, CAL26 finished up 2% at $87.5, while CAL 27 was up 1% at $85.
Calendar Year Contracts for Queensland
VIC futures prices for CAL24 closed up 3% at $59, CAL25 was up 5.5% at $64 while CAL26 was up 10% closing at $63. CAL 27 ended the month trading up 3% at $59.
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 $10.94/GJ – down a further 9% from last month. Forecast prices for 2024 increased to $13.32 – up 4% compared to February. Forecast prices for 2025 were also up 5% at $14.1/GJ.
Domestic spot gas prices were flat through March. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $11.7/GJ, a 1% decrease from February levels. This is still slightly below the regulated gas price cap of $12/GJ, and now above the LNG netback price for the first time in a few years. Prices are 26% above what they were the same time last year.
Gas storage at the key Iona storage facility increased through March. Storage ended the month at 23PJ – a 6% increase over the month. Storage is now below maximum levels, but well above the average level we have seen at this time of year for the past 8 years,
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ 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 March were down slightly, ending the month at US$121/T – an 8% drop on the February 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 has dampened the impact on electricity prices. This cap is due to expire at the end of June this year.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 3.5 years.
Environmental certificates were mainly flat or increased in price during March. VEECs increased 3% to $94 while spot LGCs increased 5% to $47. ESCs and STCs were unchanged at $22 and $40 respectively. ACCUs fell 10% to $32.5.
Future dated LGCs were up across the board through March. CAL24 increased by 5% to $49, CAL25 rose 3% to $48.5, while CAL26 increased by 2% to $40. CAL27 increased by 3% to $34.25 while CAL28 rose 5% to $28.75.
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/
Disclaimer
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