Every month, we'll share our views on the energy market and outline the headlines that can impact the supply and price of energy.
The electricity market this month
Mike Capel, Portfolio Trader, Trading and Operations
Loads across the NEM decreased into October reflecting a typical shoulder period. Average spot prices did however remain elevated driven, in part, by low hydro generation because of ongoing drier conditions and multiple baseload units on planned maintenance. Low wind generation in the back half of the month also contributed to some price uplift. There were no high-priced events where prices settled materially >$300 during the quarter.
Gas market update
Louise Colbran, Portfolio Trader, Trading and Operations
For most of the east coast, October was much wetter compared with September. Temperatures remained above average for most of the east coast and gas market demand levels dropped. Pool prices are still around the mid $9/GJ on average.
Iona Underground Storage Facility had a two-week maintenance outage meaning that summer refill was limited. Inventory increased by 1.2PJ across October up to 10.6PJ total.
Gas news headlines
October 2: As a measure to improve the transparency of gas prices, the ACCC have commenced the publication of LNG netback prices on its website. The LNG netback price is the price that a gas supplier can expect to receive for exporting its gas. Among other factors, it can influence the price of domestic gas prices in the east coast market.7
Renewable market update
October 2: Origin will supply solar power to 20 Sydney local councils in a new renewable energy agreement that will meet up to 35 per cent of their demand. Origin will also firm the solar with power from other sources such as peaking gas-fired power stations, making sure the councils have reliable supply when the sun goes down.9
October 16: The Australian Renewable Energy Agency (ARENA) announced the build of a Business Renewables Centre, encouraging Australian businesses to use renewable energy.10 The centre will be an online marketplace to purchase renewable energy through corporate Power Purchase Agreements.
October 26: Woodside announces their Greater Western Flank Phase 2 Project, located off the north-west coast of Australia has commenced gas production.11
October 29: Origin Energy’s proposed expansion of the Shoalhaven pumped hydro scheme will progress to a $5 million feasibility assessment, after receiving part-funding from ARENA.12