Edge News

 

Our team is dedicated to being across the energy industry. We analyse any changes within the market and evaluate the impact to our clients. Here you will find a range of articles ranging from major industry events through to our detailed views on energy market movements.

 

09 Apr STATE OF THE ELECTRICITY MARKET – SUMMER MARKET OVERVIEW

The electricity spot prices were higher for the Summer period (January - March) compared to the preceding three months. Although demand remained static, prices increased as a result of coal and gas generation setting prices at elevated levels. Average prices increased in all regions from the previous summer, with Queensland increasing the least at 23% and Victoria increasing the most at 62%. Across all regions, prices during the 2019 summer were higher than the 2018 summer and were very high in a historical context for Victoria, South Australia and Tasmania. Looking back across the last 10 summers, 2019 summer prices are at their highest levels in most states. Figure 1: Historical prices...

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09 Apr Accessing the STTM: Alternative gas supply

For a growing number of large energy consumers, consideration is turning to whether entering standard vanilla retail gas agreements deliver the most effective outcome. For consumers who are located within the bounds of the Sydney, Brisbane or Adelaide Short Term Trading Market (STTM) markets, many may not be aware that there is an alternative way to purchase gas. Below, we consider how the STTM works and what the benefits are of exploring this option.   What is the STTM The STTM is essentially a market for the trading of natural gas at a wholesale level at defined hubs between pipelines and distribution systems. The STTM is a day-ahead gas market operated by the...

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09 Apr Gas Market Update

Capacity Trading As of 1 March, the new Capacity Trading Platform (CTP) and Day Ahead Auction (DAA) came online. This market arose after the Council of Australian Governments (COAG) Energy Council agreed to implement the legal and regulatory framework required to give effect to the capacity trading reform package, as recommended by the Australian Energy Market Commission (AEMC) as part of its Easter Australian Wholesale Gas Market and Pipelines Framework Review. The reforms apply to the operators of transmission pipelines and compression facilities operating under the contract carriage model (collectively referred to as “transportation services”). The objective of the reforms is to encourage and facilitate trading of unutilised capacity on non-exempt transportation...

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12 Mar Clean Energy Regulator confirms 2019 RRP and STP

On 12 March 2019, the Clean Energy Regulator (CER) has confirmed the 2019 renewable power percentage (RPP) and small-scale technology percentage (STP) has been set by legislative amendment. The 2019 RRP has been set at 18.6% and the 2019 STP has been set at 21.73%. As explained by the CER, the RRP and STP set the annual statutory demand for large-scale generation certificates and small-scale technology certificates in the Renewable Energy Target. If you have any questions regarding the 2019 RRP or STP or any other matter relating to energy, please contact Edge Energy Services on 07 3905 9220 or 1800 334 336. ...

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08 Mar AEMO releases draft Marginal Loss Factors

The Australian Energy Market Operator (AEMO) released its draft marginal loss factors (MLFs) today. As generally expected, solar and wind farms that are a long distance from the regional reference point have been hurt. The most notable example of this is the Broken Hill solar farm, which has a draft MLF for FY20 of 0.7254. This is 0.2535 below the current MLF. If the draft MLF is confirmed in the final report (due 1 April 2019), this will reduce the volume of electricity sold by the solar farm by 25%. A number of other solar and wind farms had material reductions in MLF and are facing a challenging situation. Most...

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01 Mar CleanCo Moving Ahead – Part 2

With expectations that CleanCo will be trading in the NEM by mid this year, things are getting into full swing. Last week CleanCo appointed its first two key executives – Miles George and Geoff Dutaillis. Who are these new executives? Miles George has been appointed the Interim Chief Executive Officer (CEO) at CleanCo. His role at CleanCo is to secure cleaner, more affordable, sustainable energy and secure supply of electricity for Queensland (QLD). He was previously the CEO and Managing Director of Infigen Energy. After leaving Infigen Energy in 2016, Miles continued as a strategic adviser until December 2017. During and after his time at Infigen, Miles has been the Chairman of...

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14 Feb Queensland Reaches Record Demand

Queensland (QLD) operational demand (see definition in image below) reached a new all-time record of 10,052 MW at 4.55pm yesterday (13th February 2019) largely as a result of temperature driven demand. Despite record demand, spot prices remained steady with QLD generators ramping up generation and conservative bidding from key generators. Image sourced from AEMO In terms of what type of generation was keeping the lights on, black coal and gas were the two largest contributing fuel sources (as shown in the image below). At the time of peak demand, 6,458 MW of generation was coming from coal and 2,253 MW from gas (natural gas and coal seam gas). Should demand have crept...

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25 Jan HIGH TEMPERATURES AND HIGH PRICES IN SOUTHERN STATES

Edge Energy Services recently published an article on the 16th of January outlining what happens in the market when high prices and a lack of reserves are published in pre-dispatch. On the 24th January, it was a different story, where extreme temperatures and high demand in South Australia (SA) lead to load shedding, activation of RERT and operation of the emergency generators in SA. This resulted in the maximum price reaching $14,500/MWh with an average of $3,388/MW. At the start of the week the Bureau of Meteorology forecast high temperatures across SA and Victoria (VIC) for the coming week. On the morning of the 23rd January, AEMO flagged extreme temperatures for SA...

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16 Jan High temperatures forecast for southern states

At the end of the last week, AEMO flagged the possibility of extreme temperatures for the following week in South Australia, Victoria and New South Wales. Weather forecasts were showing a large uncertainty in the predicted temperatures. Predictions ranged from mid to high 30s for Victoria, low to mid 40s for South Australia and high 30s for New South Wales. The key risk in these forecasts was the possibility of temperatures exceeding 40 degrees in two or more regions simultaneously. On 11 January, AEMO published a market notice highlighting the forecast extreme temperatures in South Australia and elevated temperatures in Victoria and New South Wales. In this notice, AEMO provided forecast temperatures...

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19 Dec Update from COAG Energy Council meeting

The COAG Energy Council met today for their 21st meeting. On the agenda was AEMO addressing their work in preparing the grid for summer, bringing down electricity costs and ensuring long term grid reliability and security. AEMO highlighted the priority of work being undertaken to ensure that there is enough dispatchable generation in the NEM and integration of renewable and distributed energy resources. The Ministers agreed to a work program for the ESB to develop advice on a long term, fit for purpose market framework to support reliability that could apply from the mid-2020s. There was very little detail on this framework, however Edge will look to discover more. Reliability Ministers agreed...

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