Report reveals a tale of two halves for energy prices

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The Australian Energy Regulator’s (AER) latest Wholesale Markets Quarterly Report reveals a tale of two halves for wholesale energy prices over the July-September quarter.

While higher demand in the July and August winter months put upward pressure on prices, milder weather from late August onwards resulted in lower demand and helped to moderate prices in the quarter for some states.

Related article: Over 80% of Australians are worried about power prices

However, electricity prices this quarter were heavily affected by a significant 54 high price periods. The regulator says multiple factors impacted these high price periods and the quarter’s price outcomes.

“A combination of high demand, low wind and network outages during peak demand periods contributed to this volatility,” AER Board member Jarrod Ball explains.

Prices decreased in NSW (25%), VIC (9%) and TAS (12%), and increased in SA (35%) and QLD (5%) compared to the previous quarter, with prices in all regions higher than the same time last year.

“Importantly, forward wholesale electricity prices for 2025 declined slightly this quarter,” Ball says.

An additional 972MW of capacity was offered into the National Electricity Market this quarter by wind, gas and batteries compared to the same time last year.

Significant amounts of new capacity also entered the market this quarter, with approximately 1.45GW of capacity added through batteries (600MW), wind (729MW) and solar (116MW). However, it will take some time before these units reach full output.

East coast downstream gas market spot prices decreased by 9% (to $12.51/GJ) compared to last quarter, with price reductions linked to periods of unseasonably warm weather in late July and August.

This warmer weather also resulted in average gas demand remaining low at 103PJ, just a little above the same time last year when mild conditions saw third quarter residential and commercial gas demand fall to 10-year lows.

Related article: Report shows energy prices up in all states except Qld

Pipeline flows south from QLD remained strong in July to meet demand in southern states, before reducing and then reversing and flowing north into QLD intermittently from late August when southern demand eased.

With the reduced risk of supply shortfalls and a lower potential need for market intervention, AEMO revoked its threat to system security notice on 23 August.

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