February 2017

10 Feb Powerlink’s revised revenue proposal to the AER

In December 2016, Powerlink submitted a Revised Revenue Proposal to the Australian Energy Regulator (AER) for the 2018-2022 regulatory period. This was in response to the AER’s Draft Decision which was released in September 2016. Powerlink’s Revised Revenue Proposal at a glance The Revised Revenue Proposal is focused on responding to consumer concerns over electricity prices by driving increased efficiency and delivering cost reductions. Powerlink continues to align with the AER’s guidelines and approach to meet the needs of customers while allowing for the continued delivery of reliable supply of electricity. The AER’s Draft Decision accepted most of Powerlink’s January 2016 Revenue Proposal, including operating expenditure forecast and rate of return...

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09 Feb Heatwave conditions force load shedding in SA

A severe heatwave in South Australia yesterday culminated in increased usage that pushed demand beyond the capabilities of the generators. This led to outages in the network as the market operator commenced load shedding. Demand was the highest it had been for three years with the maximum five-minute demand set at 3077.47MW at 6:15 p.m. market time. This is despite a continued uptake of residential solar photovoltaic (PV) systems. There were some interesting announcements leading into the period. The Australian Energy Market Operator (AEMO) was aware this was an unusual event and published a market notice at 3:15 p.m. (market time) to be aware that temperatures would be high across SA, NSW...

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03 Feb LGC prices slide

Yesterday we considered the possibility of large-scale generation certificate (LGCs) prices reducing due to the federal review. Prices have slid $4/certificate this week. In recent news reports, ERM founder, Trevor St Baker said the government would need to adjust the renewable energy target (RET) to 20,000 gigawatt hours to fall in line with infrastructure expectations. "There is no way we are going to make the 33,000 target. It's impossible to get there.” Mr St Baker said. We concur, and have for quite some time.  Fundamentally, in a politically stable environment, we can only see LGC prices trending to and sitting at the full tax adjusted penalty of around $93/LGC. There aren’t enough certificates...

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02 Feb Will the Federal Government Climate Change Review affect the price of Large-Scale Generation Certificates?

A commitment by the Federal Government to reduce emissions by 2030 will see a Climate Change Review conducted this year. The government is focused on meeting our international emissions reduction commitments while also maintaining energy security and affordability. The focus of this review is to look at a range of options to reduce emissions by 26 to 28 percent below 2005 levels. The review will consider the integration of climate change and energy policy, the impact of state-based policies on the national approach, the role of the Emissions Reduction Fund and its safeguard mechanism, complementary polices, and potential goals beyond 2030. While the review does not explicitly mention the Renewable Energy Target...

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02 Feb High Demand contributes to record prices in Northern States

Increased electricity demand in both Queensland and New South Wales during January 2017 has had a significant impact on electricity prices for this period. Queensland maximum and average demand was 8 percent higher than January 2016, while New South Wales was 9 percent higher compared to the previous year. Higher demand helped in setting record prices for both states. The Queensland spot price averaged $197.65/MWh for January 2017. The previous record for January was set in 2013 when the price was $155.90/MWh. New South Wales reached $82.69/MWh eclipsing the previous January record of $66.95/MWh set in 2001. Higher spot prices are currently expected to continue for the foreseeable future with forward contracts for...

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