The Australian Energy Regulator’s latest Wholesale Markets Quarterly Report reveals wholesale energy price increases in all National Electricity Market (NEM) states except for Queensland compared to the previous quarter.
In a trend consistent with previous years, the end of warmer months saw wholesale electricity prices increase between $65/MWh (SA) and $87/MWh (NSW), and the price in Queensland decrease by $29/MWh compared to the previous quarter.
Related article: Flexible gas backs record demand in NEM during chilly winter
This quarter saw electricity demand and price increases across all regions except for Queensland compared to the same time last year.
AER Board member Jarrod Ball said both seasonal weather patterns and tight market conditions contributed to prices during the quarter.
“While we would expect to see wholesale prices rise as weather in southern states cools and demand rises to keep people warm, the combined impact of cold snaps, planned and unforeseen network outages, combined with rebidding and lower solar and wind output has pushed electricity prices higher than this time last year,” Ball said.
Decreased solar generation as the days get shorter is typical for the second quarter of the year. However, wind generation this quarter contributed 12% of total NEM generation—its lowest share for any quarter since Q2 2021 when it contributed 11% of total generation.
To compensate, higher-priced gas and hydro generation both increased this quarter, with gas-powered generation (GPG) rising by 70% (from 973MW to 1,653MW) compared to the previous quarter and 16% (from 1,420MW) on this time last year.
There were also 19 high price events during the quarter, which led to the cumulative price exceeding the cumulative price threshold in energy for the second time in the history of the NEM. These contributed around $55/MWh to NSW’s price increase from the last quarter.
Related article: AER report shows wholesale energy prices down in 2023
Average forward prices for electricity for the 2025 calendar year increased in all regions, ranging from $24/MWh (QLD) to $41/MWh (SA), indicating an expectation of higher spot prices going forward.
One new wind generator in South Australia entered the market this quarter and will be able to contribute up to 201MW when fully commissioned. An increase in new generation is expected during the rest of 2024 and first half of 2025.
