January 2024 – Market Update



Spot market

In the spot market, we saw prices rise sharply in Queensland, where sweltering temperatures and high humidity led to a new maximum record demand.

At 5pm on January 22, demand for electricity smashed through the 11,000 megawatt mark for the first time ever, sailing past the previous record of 10,070 megawatts set last March.

For those keeping score at home, that’s a massive 9.3 per cent increase on the previous record.

As the sun set and solar generation ramped down, prices ramped up, peaking at $9,799.63 per megawatt hour for the 6:25 and 6:30 dispatch periods, before demand subsided throughout the evening.

For the month, Queensland finished up $67.44 at $160.43. Those higher prices filtered down to New South Wales, to a less dramatic extent (up $12.92 at $81.17), but in Victoria, prices actually fell throughout the month (finishing down $3.19 at $22.10), as Southerners enjoyed mild weather and plenty of availability.

Contract market

In the contract market, this reminder of just how volatile the spot market can be contributed to a slight price rise for Cal 25 in Queensland (up 75 cents at $90.50).

Cal 25 prices were down slightly in New South Wales, which wasn’t as heavily affected (down 35 cents at $102.80). Cal 25 prices also fell in Victoria (down $4 at $64.15), on the back of low spot market prices and cheap gas.

Looking further ahead, Cal 26 prices are following the same trends in Queensland (up 45 cents at $89.50) and Victoria (down $3.60 at $64). The slight uptick in the New South Wales price (up 75 cents at $111.30), reflects the imminent closure of Australia’s largest coal-fired power station, Eraring.

Environmental market 

Turning our attention to the environmental market, we saw prices drop for Large-Scale Generation Certificates (LGCs, closing the month down $2.75 at $45.75). With LGC participants finalising their requirements for their 2023 liability, demand for these certificates has fallen.

Australian Carbon Credit Units (ACCUs) finished the month $2 higher at $35. This increase was largely driven by buying demand from liable entities entering the market.

Meanwhile, prices were up slightly for Small-Scale Technology Certificates (STCs, up 35 cents at $39.65), on the back of some late buying of 2023 certificates.

That’s it for January. We’re crossing our fingers for a cooler, less humid February, when we’ll update you on market conditions again.