July 2023 – Market Update

Spot market prices continued to fall in July, while the future of coal-fired generation in New South Wales made an impact on the forward market.

Spot market

In the spot market, we saw prices continue to fall in Queensland (down $25.35 at $77.27) and New South Wales (down $21.05 at $84.15), while remaining steady in Victoria (up just 68 cents at $55.21).

Unseasonably warm weather throughout July meant we could give our heaters a break, which reduced the demand on the grid.

There was also high penetration of solar in the middle of the day, ensuring plentiful supply.

Contract market

In the forward market, prices decreased on the back of reports that the New South Wales government is considering operating the nation’s largest power station beyond its expected 2025 closure date. Cal 25 prices finished the month at $93 in Queensland (down $3.80), $114.75 in New South Wales (down $9.15) and $69.30 in Victoria (down $7.40).

Looking further ahead to Cal 26, we can see this decrease fed through to the back end of the curve, with prices finishing at $91.50 in Queensland (down $1.50), $122 in New South Wales (down $9.90) and $74 in Victoria (down $5).

The New South Wales government has said it will hold off on a decision about the future of the coal-fired station until it receives a health check on the state’s energy security. That report is due early August.


Environmental market 


In the environmental market, significant retail buying put upward pressure on the curve for Large-Scale Generation Certificates (LGCs), which finished the month up $1.75 at $56.25.

This appears to be the result of retail hedging, with buyers looking to reduce their exposure to a potential rise in LGC prices.

On the other hand, prices for Australian Carbon Credit Units (ACCUs) continued to fall, finishing the month down $2.35 at $29.50. This was due to the recent influx of sellers in the market who were looking to lock in revenue before the end of the financial year, increasing the availability of ACCUs and pushing prices lower.

Meanwhile, the clearing house for Small-Scale Technology Certificates (STCs) finished the month 4 million certificates in deficit, after the passing of the second quarter certificate surrender deadline. This meant STCs remained steady at the fixed price of $40.

And that’s it for July… wishing you all the best for August from the team at Stanwell Energy!