2023 is well underway and the 2022 Energy Crisis now seems to be a thing of the past. Electricity spot prices, forward prices, gas prices, and LGCs all continue to soften as the year gets off to a promising start.
We apologise for the tardiness of our January 2022 Monthly Market Report. It has been a very busy start to 2023 for the EnergyByte team, as the challenges facing the energy industry bring forward new clients looking to better understand what's happening in the energy market and how to manage energy costs, optimise asset portfolios, and hedge their risk in the short, medium and long term. If you are keen to find out about other services the EnergyByte team can offer you organisation, don't hesitate to reach out to Carl Daley. And stay tuned as we hope to have the February monthly report to you soon.
1.0 Overview
The highlights for the month are:
- Mild weather contributed to soft electricity spot prices during the first month of the year. Qld had the highest average price with $98.96/MWh, followed closely by NSW with $94.39/MWh and Tas with $86.86/MWh. Average prices during January for SA and Vic were around $50/MWh
- Total energy consumption was significantly lower for mainland NEM regions during January, with milder weather and the absence of significant heat waves contributing to softer demand. Mild weather conditions also resulted in low maximum demand across the NEM, with the exception of Vic where demand was 5% higher than at the same time last year
- The weather outlook shows maximum temperatures are likely to be above average for most of Australia. The rainfall outlook shows lower rainfall levels for the southern parts of WA, eastern and southeastern SA, eastern Victoria, the Riverina in NSW, northwest Tasmania, and average rainfall for the rest of the country
- Generator offers during January revealed Black Coal generators moving offers to higher price bands, while gas-powered generators offered more capacity across all price bands. Hydro generators moved capacity from the extreme price bands to the price band between $300/MWh and $500/MWh
- New generation had a typically slow start to the year with no new connections during January. Early in February the 150MW Hazelwood Battery Energy Storage System connected to the NEM in Victoria.
- Despite Black coal and gas-fired generation picking up during January, market share remained low compared to the same time last year, while rooftop solar PV and Utility-scale solar generation continued to take more market share.
- NSW baseload outages were similar to past years at 1,350MW. Qld outages were significantly higher with between 1,520MW to 2,240MW unavailable, while Vic outages remain low during January
- Wind and Solar Generation Curtailment was high across the NEM during January
- Snowy Hydro Water Storages remain high around 65% capacity, while Hydro Tas storages maintain levels above 40% capacity
- Following a dramatic softening of electricity forward prices across the NEM during December, prices plateaued during January averaging around $100/MWh across the NEM, with NSW the highest FY-23/24 price at $129/MWh and Vic the lowest at $85.50/MWh
- Gas spot prices climbed steadily during January reaching $16/GJ in the STTM and $14/GJ in the DWGM
- LGC spot prices continued to soften during January closing the month just above $50/certificate, while STC spot prices continue to hold steady at $40/certificate
