Following an unprecedented second quarter in the energy market, the third quarter settles down, but finished as the second-highest price period in the market's history. Forward market prices continue to rise.
There is no doubt that the national energy market is undergoing massive change and facing enormous challenges. The past six months have seen the highest electricity and gas prices on record with Q2-22 recording the highest average spot prices, followed by Q3-22 with the second-highest average electricity and gas spot prices on record. Despite the resolution of many domestic factors that contributed to the extreme price events during Q2-22, prices remained considerably high.
One notable trend in the last two months has been the record high portion of prices outcomes between $100 to $300/MWh, resulting in average spot prices maintaining around $150/MWh on average across the NEM. Another trend has been surging electricity forward market prices, which saw some relief in the second week of September, but have been on the run since, and are at levels never seen in the history of the NEM. Also never seen before, was the biggest electricity forward daily price movement on record, with all east coast States having the largest daily price jump for the next 3-years as covered in our recent blog.
More change and challenges lie ahead for the energy market. The global energy crisis remains in full swing and domestic challenges lie ahead with the looming closure of the Liddell power station, and the latest announcement from AGL that the Loy Yang A and Bayswater power stations will also be closed earlier than originally planned. State Governments stepped up with new funding and revised Renewable Energy Targets, but will it bring enough projects, the right projects, and in time, to avoid a further energy crises?