February 2024 – Market Update



Spot market

In the spot market, we saw the most activity in Victoria, where extreme winds toppled six of the state’s high voltage transmission towers and took out two sets of 500 kilovolt transmission lines.

This led to an interruption of electricity supply for about two hours as the power system stabilised. The Value of Lost Load (VOLL) during this time contributed to the average spot price rising to $82.94 for the month, up $60.85.

Meanwhile, we saw prices soften in Queensland, after high temperatures, humidity and record dew points had led to a new demand record being set last month. While it was still hot in February, conditions weren’t as extreme, which led to the average spot price falling to $119.73, down $40.70.

On the other hand, New South Wales experienced some particularly warm weather throughout the month after a relatively subdued January, leading demand to rise. This led the state’s spot price to rise to $111.66, up $30.49.

Contract market

The activity in the spot market wasn’t enough to make a major impact on the contract market this month. Cal 25 prices fell slightly in each state, finishing at $88.25 in Queensland (down $2.25); $99 in New South Wales (down $3.80); and $60.80 in Victoria (down $3.35).

With low liquidity and less volume trading overall, prices started to trend down slowly. Looking ahead to Cal 26, the relative illiquidity in the market has led prices to drop across the curve, finishing at $85.95 in Queensland (down $3.55); $105.05 in New South Wales (down $6.25); and $57 in Victoria (down $7).

Environmental market 

In the environmental market, Large-Scale Generation Certificates (LGCs) are trading slightly lower at $44.50 (down $1.25). This follows the passing of the Cal 23 surrender deadline on February 14, which eased buying requirements.

Australian Carbon Credit Units (ACCUs) continue to trade in the $35 to $36 range, opening at the former and closing at the latter.

Meanwhile, Small-Scale Technology Certificates (STCs) closed the month trading at $39.65, close to the clearing house price of $40.

That’s it for February! We look forward to seeing you back here next month, when we’ll update you on market conditions again.