Energy regulator reveals lower wholesale electricity prices
Wholesale electricity prices have fallen to their lowest quarterly level in five years.
Wholesale electricity prices have fallen to their lowest quarterly level in five years and gas was the cheapest since 2016 even as shortage risks spiked in NSW.
Power prices fell below $110 per megawatt hour in every state in the national electricity market for the first time since 2015 despite a heatwave in late January causing dramatic price spikes in NSW, Victoria and South Australia.
More rooftop solar and a generally mild summer led to less demand in the three months to March 31, with lower spot prices for gas and coal feeding into lower offers to the market.
Victoria and NSW had the most expensive quarterly spot prices at $109/MWh and $108/MWh respectively, with South Australia at $81/MWh, Queensland at $57/MWh and Tasmania $44/MWh, an Australian Energy Regulator report found.
South Australia had topped the charts at $220/MWh for the same period a year earlier, with Victoria at $213/MWh, although comparisons were difficult with weather conditions in early 2019 hotter, which drove higher demand.
Demand was low across most regions in the first quarter, although COVID-19 did not appear to have a major impact.
“To date, there does not appear to be a significant impact on demand as a result of these measures,” the AER said.
“Generally, demand has continued to trend down since the beginning of March in all regions. In NSW, for example, the downward trend in demand seen in recent weeks appears to be similar to the reduction in demand observed at this time last year.”
Average quarterly power generation was 1000 megawatts, or 4 per cent lower than 12 months earlier with the biggest falls in higher-cost coal and gas generation.
Wind, solar and hydro output rose, with the renewable sources displacing coal and gas despite input costs for the fossil fuels “notably lower” than the first quarter of 2019.
Gas generation fell to its lowest three-month level in five years with weaker demand in South Australia and Victoria.
The average gas spot price fell to $5.72 a gigajoule, from $9.91 a year ago, reflecting dramatic falls in international LNG prices and the impact of the pandemic on regional demand.