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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.


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.


November 2023 – Market Update



Spot market

In the spot market, we saw prices buck the downward trend of the last few months and go up in Queensland (finishing the month up $35.92 at $72.97), New South Wales (up $45.27 at $87.35) and Victoria (up $17.75 at $34.94).

There were a few reasons for this. There was more cloud coverage compared to October, pushing the renewable output to lower levels. This meant we didn’t see the same periods of negative pricing in November that brought down the average price in October.

November also saw unplanned outages in New South Wales that pushed spot prices higher.

Due to warmer weather throughout November, there was also more demand for air conditioning at all hours of the day, which contributed to the rise in spot prices.

Contract market

While prices were on the rise in the spot market, it was a different story in the forward market.

The expected return of a number of units that have been offline means there’s shaping up to be plenty of generation availability in the year ahead, particularly in Queensland and New South Wales.

That optimistic forecast for availability has led Cal 25 prices to decrease – finishing the month down $2.40 in Queensland at $91.25; down $8.05 in New South Wales at $106.35; and down 50 cents in Victoria at $68.20.

Looking further ahead, Cal 26 prices are following the same trend, and are also down across the board. Queensland finished down 60 cents at $89.65; New South Wales down $6.90 at $111.55; and Victoria down $2.50 at $67.

Environmental market 

It was an eventful month in the environmental market.

The Federal Government announced an expansion of the Capacity Investment Scheme. This announcement has put downward pressure on the price of Large-Scale Generation Certificates (LGCs), which finished down $2.60 at $46.90.

On the other hand, buying demand picked up throughout the month for Australian Carbon Credit Units (ACCUs), which closed $1.75 higher at $32.00.

Finally, the clearing house for Small-Scale Technology Certificates (STCs) entered surplus during the month, which meant wholesale trading of these certificates resumed. This resulted in STC prices falling, and by the end of November, they were trading consistently at $39.30, down 60 cents on last month.

That’s it for the November wrap. We hope you’ve enjoyed our 2023 market updates, and from all of us at Stanwell Energy, we wish you a safe holiday season.