Powering business market report

November 2018

Every month, we'll share our views on the energy market and outline the headlines that can impact the supply and price of energy.

In Origin news

Amazon Web Services and energy retailing

Cameron Briggs, General Manager Future Energy, talks about using AWS to transform the Origin business

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The electricity market this month


Finlay Macdonald-Stack, Portfolio Trader, Trading Operations

Demand across the NEM increased marginally in November as warmer temperatures started impacting markets. This was characterised by a few large demand days, particularly in QLD and NSW, rather than prolonged periods of higher demand. The average price in QLD increased by $10/MWh due to several days of high demand when Queensland Nickel was constrained, causing prolonged higher prices in QLD. Across the rest of the NEM, prices remained in line with October, with similar levels of renewable generation and many baseload units on planned maintenance outages.

Baseload capacity increased at the end of November with the return to service of many of these baseload units. There were four instances of price volatility (settlement >$300/MWh), three in QLD during high demand periods when QNI was at capacity and one in SA during a low wind period when the interconnectors flowing into the state were at their maximum capacity.


Electricity news headlines

11 November: AEMO released the Quarterly Energy Dynamics report for Q3 2018 (PDF 1.8 mB).1 According to the report, Q3 1 (July to 30 September 2018) “recorded the highest NEM hydro generation since 2013, underpinned by record quarterly hydro output from Hydro Tasmania.” This resulted in a substantial reduction to Tasmania’s wholesale electricity price to $43/MWh. The record output also meant a significant increase of 18% in transfers to Victoria and New South Wales via the Basslink interconnector, the highest level since Q4 2016.

13 November: The World Energy Outlook (WEO), the annual publication by the International Energy Agency was presented in London, detailing worldwide trends in energy demand and supply.2 Among its findings, the report details that oil markets are entering a period of renewed uncertainty, natural gas is on the rise with China’s rapid demand growth erasing talk of a ‘gas glut’ and for the first time, the global population without access to electricity fell below 1 billion.

18 November: Along with Japan, New Zealand, and US Vice President Mike Pence, Prime Minister Scott Morrison commits to help build an electricity network providing access to electricity to all areas of Papua New Guinea by 2030.3

20 November: Origin’s demand management trial using AI to shift energy usage to different times of day will be rolled out nationally, after a successful trial with South Australian commercial and industrial customers found that significant savings were on offer.4

23 November: A five-year partnership between Fortescue Metals and the Commonwealth Scientific and Industrial Research Organisation (CSIRO) will look at transporting hydrogen to Asian economies that import energy.5

28 November: WA Premier Mark McGowen announces a lift on fracking ban following a 12-month inquiry finding fracking for unconventional gas can be done safely.6

30 November: Origin announces concession card holders in New South Wales, ACT, Queensland and South Australia on standing offers or non-discounted plans will get an automatic 10 per cent discount on electricity usage charges from 1 January 2019.7

30 November: Energy Minister Angus Taylor announces a new collaboration between the Bureau of Meteorology (BOM) and the Australian Energy Market Operator (AEMO). Data from BOM has been used in recent months to aid in key planning, however senior meteorologists will now work with AEMO to help prepare for weather events that affect electricity supply.8

Gas market update


Louise Colbran, Portfolio Trader, Trading and Operations

November temperatures were slightly above average across the east coast. Brisbane’s extreme heatwave at the end of the month increased demand and gas-fired generation requirements.

Iona Underground Storage sits at just over 12PJ with only 1.5PJ being injected into the reservoir over November.This is much lower than it has been historically for this time of year, with differing reasons as to why participants have been unable to refill.

Gas pool prices continue to sit well above the 2018 average and November has been the highest on average for the calendar year so far.


Gas news headlines

5 November: An agreement has been reached on long term infrastructure sharing arrangements between Australia Pacific LNG and the QCLNG project, with Australia Pacific LNG also agreeing to secure additional gas supplies.9

15 November: AEMO’s Q3 report outlines a decline in year-on-year demand for gas since Q3 2017.  However, “the average quarterly gas prices in the Declared Wholesale Gas Market (DWGM) in Victoria and Brisbane’s Short-Term Trading Market (STTM) were the second highest on record. The price changes have coincided with a reduced supply from Longford, an increase in pipeline deliveries to Curtis Island for LNG export and increasing international oil and gas prices.”10

Renewable market update


1 November: Emerging Energy Program for NSW business launches with $55 million funding available to eligible projects that can demonstrate the ability to provide dispatchable or on-demand energy to diversify electricity supply and support renewable sources.11

2 November: NSW government plans to create virtual power plants; installing solar panels and batteries on hospitals and schools across the state.12

15 November: According to AEMO’s Quarterly Energy Dynamics Q3 report,13 “over 1,200 MW of new large-scale solar and wind capacity began generating during the quarter.” Renewable generation accounted for 20% of the overall NEM supply mix, with quarterly wind output exceeding Gas-powered Generation (GPG) for the first time. Large-scale solar capacity and favourable wind conditions during Q3 led to record quarterly variable renewable energy (VRE) output. Quarterly NEM emissions were at their lowest level on record, both in terms of total emissions and emission intensity.

30 November: GEM director Tristan Edis believes we could achieve 78% of renewables by 2030 if we continue with the current rate of renewable installation.14 The current rate of solar installs from this time last year is 76 percent.


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