Jay Ros

Mild April weather led to subdued demand and average spot price outcomes across the NEM, except for short evening peak volatility for QLD and NSW early in the month. In the news, success for Labor Party confirms the ongoing transition to renewables and a strong stance on emission reduction targets.

The Q1-25 quarter electricity spot prices finished at an unremarkable level, except for Tasmania. Variable Renewable Energy performed strongly, and gas generation was low. Meanwhile, gas spot prices also remained calm, while storage levels were filled, with a falling forward market.

Tasmania’s average spot price for February was the highest in the NEM, despite exceptionally low demand and accounted for almost half of all FCAS cost for the month. East coast gas spot prices remained high at around $13.50/GJ for the DWGM, and $12.50/GJ in Victoria’s STTM.

January maximum demand levels were low compared to historical levels resulting in relatively soft spot price outcomes, except for brief price volatility in QLD and NSW. High offers from Hydro kept TAS prices around $120/MWh. Gas prices retreated below $14/GJ in following a lengthy rally in Q4-24.

In 2024, record new generation capacity joined the electricity market. Wind weighted prices were at record lows for all regions except SA, while higher daytime prices improved solar farm performance across the NEM. Broader ranges in operational demand across regions intensified market volatility.

The energy market was under considerable stress during 2024, leading to higher electricity spot prices. The pain was particularly felt towards the north with QLD and NSW recording their second-highest average prices after the 2022 Energy Crisis.

High prices persisted in the electricity and gas spot markets during November, with extreme electricity spot prices in QLD and NSW, and surging gas spot prices in the STTM. The NEM survived the hottest November on record, but we aren’t out of the woods yet with a hot summer on the radar.

Mild sunny weather led to record low minimum demand for the NEM as well as record lows in VIC and SA. Meanwhile QLD and NSW continued to separate from the rest of the NEM with significantly stronger power spot prices. Gas spot prices continued to rise with average prices around $13/GJ in October.

The NEM Q3 average price finished the highest since the 2022 Energy Crisis despite extremely low September prices for VIC and TAS. In SA, volatile winds drove volatile spot prices, while mild days with high VRE crushed prices in VIC and TAS. Meanwhile, NSW and QLD had above average price levels.

Forward electricity contract prices went for a wild ride in Q3-24. Volatile weather played a significant part in driving price outcomes, with strong price rallies in July and August followed by softening prices in September, closing well below market expectations at the beginning of the quarter.

Cold weather and low VRE generation contributed to extreme prices early in August. This was followed by unusually warm temperatures, softening demand, falling gas consumption and softer spot prices driven by record levels of renewable generation.

Electricity spot prices remained high across the NEM in July as very low temperatures drove strong demand. SA experienced extreme price volatility late in the month as cold temperatures coincided with very low wind generation. East Coast gas spot prices also remained high averaging above $13/GJ.