After an unusually warm winter, the increasing likelihood of an El Niño weather pattern has the market preparing for a hot and dry summer.
In the spot market, we saw prices continue to fall in Queensland (finishing the month down $9.64 at $67.63). The downward trajectory in prices has been the result of an unusually warm and sunny winter, which has led to reduced demand for heating and an increase in the supply of solar generation.
On the other hand, unit outages and some cloudy and rainy days that curtailed solar generation caused spot prices to rise in New South Wales (up $9.16 at $93.31) and Victoria (up $9.45 at $64.66).
Heading into summer, an El Niño weather pattern is looking increasingly likely.
That means this summer could be hotter and drier than the last three, which have been marked by La Niña weather patterns.
In the contract market, the increased likelihood of an El Niño summer is pushing up the forward curve across all states (finishing the month up $3.05 at $96.05 in Queensland, up $7.05 at $121.80 in New South Wales and up $4.30 at $73.60 in Victoria).
Looking further ahead to Cal 26, we can see this increase reflected in the back end of the curve, with prices finishing the month up $1.40 at $92.90 in Queensland, up $4 at $126 in New South Wales, and up $1.20 at $75.20 in Victoria.
In the environmental market, a slow-down in retail buying led to a drop in the price of Large-Scale Generation Certificates (LGCs), finishing the month down $2.25 at $54.
Prices for Australian Carbon Credit Units (ACCUs) finished slightly up on last month (up $1 at $30.50), while Small Scale Technology Certificates (STCs) remained steady at $40, with the STC clearing house remaining more than three million certificates in deficit.
And that’s it for August. For more information on the market and the impact of the El Niño summer, contact your Account Manager at Stanwell Energy.
And from all the team, we wish you all the best as we spring into September!