June 2024 – Market Update

Market Update – June 2024

Low wind and gas production had an impact on prices across the National Electricity Market in June, while New South Wales normalised after a challenging May.

Spot Market 

In the spot market, prices were impacted by low wind production in the southern states, as well as increased gas prices due to low gas production and system-wide constraints. 

At the same time, colder weather drove up demand across the board, leading to higher prices in Queensland (finishing up $31.98 at $124.67) and Victoria (up $31.26 at $164.23).  

Despite these factors, prices in New South Wales actually fell – closing the month down $120.81 at $152.75. This reflects the state’s extremely high spot prices in May, which were partly driven by line constraints and outages that were resolved by June.

Contract market

Prices in New South Wales also fell in the contract market, with the Cal 25 price finishing the month down $6 at $130.40. Again, this says more about the volatility New South Wales experienced in May than it does about conditions in June.

In Queensland and Victoria, the ongoing wind droughts and high gas prices that pushed up spot prices in those states also drove Cal 25 prices higher – up 55 cents in Queensland (at $112.10) and up $3.10 in Victoria (at $84.35). 

The drop in New South Wales prices rippled through to Cal 26, down $5 at $131. There was little volatility otherwise, though, with the Queensland Cal 26 price finishing the month up 5 cents (at $103.40) and Victoria finishing down $1.95 (at $76). 


Environmental market

In the environmental sector, we saw high levels of liquidity in the market for Large-Scale Generation Certificates (LGCs). This placed downward pressure on prices, which finished the month down 50 cents at $45.50.

Meanwhile, renewed buying interest in the carbon market drove up the price of Australian Carbon Credit Units (ACCUs), which closed $1.25 higher at $34.25.

The Clearing House for Small-Scale Technology Certificates (STCs) returned to surplus, but trading stayed close to the Clearing House price of $40 at $39.90. 

By the end of the month, the Clearing House was only in surplus by about 6,000 certificates, indicating a likely return to deficit by the Q2 surrender deadline on July 28.

And that’s another recap of the month. 

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Have a great month ahead, and we’ll see you here again next month.