The National Electricity Market experienced a five-year low in wholesale electricity prices last financial year (2020/21), according to the Australian Energy Regulator’s (AER) latest Wholesale Markets Quarterly performance report.
Chair of AER, Clare Savage said all regions recorded prices lower than $75/MWh for the first time since 2014/15, with Tasmania leading the way with an average financial year price of $45/MWh, down from $56/MWh in the previous year and New South Wales (NSW) recording the highest price at $72/MWh, down from $79/MWh in the previous year.
Ms Savage said prices fell in all regions except Queensland, despite some significant price increases in the last quarter of the financial year (Q2 2021).
“The Report shows wholesale electricity prices in Queensland reached their highest Q2 level ever ($141/MWh), while prices in NSW reached their highest Q2 level since 2007 ($129/MWh),” Ms Savage said.
“The Q2 price increases in these two regions were largely driven by a high number of planned and unplanned coal generator outages, as well as transmission line outages that limited both States’ ability to import cheaper generation from other regions, especially during May and June,” she said.
“Planned outages by generators across the network are not uncommon in Q2, given it is considered a shoulder season before the winter peak.”
Ms Savage said there were some significant key drivers behind the high-priced events during the quarter, in particular the Callide C power station fire on 25 May, which came on top of other outages, as well as the early onset of winter.
The Chair said reduced supply at a time of high demand meant significantly higher prices across the east coast for more than three weeks from 25 May to 16 June.
“It was a similar story for the gas market during Q2 with the unplanned electricity outages creating volatility for buyers and sellers in the spot market,” she said.
Ms Savage said customers in the domestic gas market also faced continued pressure from unseasonably high prices in the international market caused by reduced inventories following high demand in the northern hemisphere winter.
She said the outlook was for high international gas prices to continue during the next two quarters of 2021/22, which meant gas price volatility was likely to remain throughout the rest of the year.
The AER’s 70-page Wholesale Markets Quarterly Report can be accessed at this PS News link.
