Could this be the calm before the storm? Low demand and high renewable generation crushed electricity spot prices during October, but how long can it last? El Niño continues to threaten a hot and dry summer with AEMO's Summer Outlook painting the picture of a market on a knife's edge.
Highlights for the month are:
- Spot prices were crushed across the NEM with VIC recording the lowest October average price on record and SA the second lowest for October
- Gas hub prices rallied in both the STTM and the DWGM with prices surging from around $6/GJ early in the month to a close of around$12/GJ by the end of October
- Gas-powered generation during October for the NEM was the lowest in 20 years with just under 443GWh. Utility Scale and Rooftop Solar generation were high across the NEM during October, setting record highs in QLD. Wind generation was also high across the NEM during October
- Negative prices were high for all mainland NEM regions, with QLD and NSW at record levels during October
- Prices above $300/MWh were at the lowest level since Oct-21
- Total energy consumption was considerably lower across the NEM compared to the same time last year. VIC set a record low October operational demand, while QLD, NSW and SA all set new record minimum operation demand
- El Niño continues to grip the country with very warm temperatures and low rainfall expected during summer, increasing the risk of bushfires
- LNG exports were the third highest on record with a substantial jump in exports to China during October
- AEMO's 2023/24 Summer Readiness Report has highlighted numerous risks and challenges facing the NEM during the coming summer, including extreme heatwaves, bushfire risk, extreme peak demand, high reliance on limited energy storage facilities during peak demand periods or unplanned outages, and Expected Unserved Energy (USE) is forecast above the Interim Reliability Measure for Vic and SA.
