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.

14 Nov National Energy Guarantee: it’s over

Posted at 15:47h in Edge Insights, Electricity, Energy Markets, News by Alex Driscoll

In late 2017, the Energy Security Board (ESB) developed a scheme to provide investment certainty in the electricity market, which would address Australia’s commitments under the Paris Agreement. The Coalition had ruled out a carbon tax, other cap-and-trade schemes and virtually any other scheme which had been attempted in the past. This left very few options for the ESB to appropriately address investment certainty in the electricity market. The ESB eventually developed an innovative scheme called the National Energy Guarantee (NEG). The basis of the NEG was essentially a cap-and-trade scheme for environmental certificates and, as a sweetener, it also had a reliability obligation. Essentially, the scheme was linked to contracts...

14 Nov Gas Market Update

Posted at 15:45h in Edge Insights, Gas, News by Alex Driscoll

Domestic gas prices have increased again as Queensland continues to export most domestic gas overseas in the form of Liquefied Natural Gas (LNG). Outages in early 2018 had limited output from the LNG facilities, however all trains are now available. The increase in total gas extracted on the East Coast of Australia is the largest contributor to the increase in gas prices. Before LNG demand, domestic gas could be extracted from cheap resources. However, as more gas is extracted from Roma, Queensland, the price of extraction has increased, which is then passed onto consumers. With the ability to sell gas overseas, producers are also looking to obtain a similar price domestically...

11 Oct 2019 forward curve continue to rise

Posted at 11:47h in Energy Markets, News by Edge Admin

The electricity forward price for 2019 continue to increase as fears around system security, adequacy of supply and stressed buyers increase. Since the start of the financial year, forward prices across all mainland states in the National Electricity Market has been increasing. From 1 July 2018 to close of business 9 October 2018, CAL19 prices have increased by between $8.35/MWh and $18.78/MWh The largest increase has been in Victoria, closely followed by New South Wales. Victoria has now overtaken South Australia as the most expensive region to purchase 2019 contracts. Prices have been gradually increasing since the start of the financial year however since Monday 27 August, New South Wales and Victorian prices...

11 Sep Victorian Renewable Energy Auction Scheme

Posted at 10:52h in Energy Markets, News by Alex Driscoll

The Victorian Renewable Energy Auction Scheme has come to a close and successfully underwritten six new renewable projects with a combined generation capacity of 928 MW. The target strike price in the contract has been known since the auction was announced in November 2018. These prices are: $56.52/MWh for wind $53.06/MWh for fixed plate solar $56.85/MWh for single axis tracking solar It is understood that prices achieved came in around the target prices. These are some of the most competitively priced agreements in the market. The VIC Government has committed to a 15 year CFD for each of the projects with a price floor of $0.00/MWh. The successful projects are: Berrybank wind...

10 Sep AEMO Seeking Feedback on Marginal Loss Factor Calculations

Posted at 13:18h in Energy Markets, News by Alex Driscoll

Over the last few years, there has been a drop in the Marginal Loss Factor (MLF) in the North Queensland region. The MLF is applied to generation for the purposes of calculating how much revenue a generator will received for its electricity. A lower MLF means proportionately lower spot electricity revenue. Following the installation of several large solar farms in the North Queensland region, the loss factors have started to drop (as shown in the graph below). As more generation is built further away from where the electricity is used, the loss factor deteriorates. This would have been a surprise to many of the investors as, historically, the MLFs have been stable...

31 Aug CleanCo moving ahead

Posted at 10:18h in Electricity, Energy Markets, Gas, News, Renewables, Solar, Water by Alex Driscoll

In a media statement released 30 August, the Queensland Government confirmed their intention to establish CleanCo, Queensland’s third publicly owned electricity generator. CleanCo will have a strategic portfolio of low and no emission power generations assets, and will build, own and operate new renewable generation. It is understood that CleanCo will take control of assets including Wivenhoe, Barron Gorge and Kareeya hydro power stations and the Swanbank E gas power station, courtesy of a restructure of the two current publicly-owned electricity generators – CS Energy and Stanwell Corporation. CleanCo is expected to be trading by mid-2019....

27 Aug Loss of critical infrastructure leads to loss of power

Posted at 15:26h in Electricity, Energy Markets, News by Alex Driscoll

On Saturday, two critical lines connecting Queensland to the rest of the National Electricity Market (NEM) were lost resulting in load shedding. In total, New South Wales shed 800 MW of load, Victoria 280 MW and 80 MW in Tasmania. This was predominately industrial load which was reconnected within an hour. Lightning is the most likely cause. While farmers in Northern New South Wales and Southern Queensland were celebrating much needed rain, the transmissions lines between Bulli Creek and Dumaresq tripped off. At the same time, the line was lost between Armidale and Tamworth in Northern New South Wales. At the same time, South Australia was separated from Victoria. Refer to image...

24 Aug AEMO releases the latest Electricity Statement of Opportunity

Posted at 16:14h in Energy Markets, News by Alex Driscoll

AEMO released their latest Electricity Statement of Opportunity (ESOO) earlier today. Unlike the previous ESOO and the more recent Integrated System Plan (ISP), AEMO is now expecting a heightened probability of the reliability standard not being met. The ISP was released only two months ago and showed that it was highly improbable that the reliability standard would be breached. The reliability standard is a technical standard which basically mandates that no more than 0.002% of demand in a given region can go unmet in a financial year. The reliability of the system raised two questions: Why did AEMO rush through new legislation which allows it to spend money on the Reliability...

23 Aug Additional Small Scale Solar Coming to Victoria

Posted at 12:05h in Energy Markets, News, Renewables, Solar by Alex Driscoll

The Victorian Government has announced that it will offer half priced solar panels to 650,000 households over the next 10 years. This scheme, known as The Solar Home scheme, is currently valued at $1.24 billion and is open to owner-occupied homes with: A combined household income of less than $180,000 per year; andA home value of up to $3 million. Households who are unable to install solar panels can instead choose to get a $1,000 rebate by changing their current hot water system to a solar hot water system. The solar hot water rebate is open to up to 60,000 homes. How will this impact the market? 2017 had the highest rate of installation...

21 Aug Changes to the National Energy Guarantee

Posted at 11:34h in Electricity, Energy Markets, News by Alex Driscoll

The Prime Minister Malcolm Turnbull has, once again, made last minute changes to the National Energy Guarantee (NEG). When the states threatened to walk away from the NEG, Mr Turnbull responded by making the emissions target regulated rather than legislated. This means that a minister is able to change the target without the support of the parliament. Over the weekend, Mr Turnbull came under pressure internally with several backbenchers, led by former Prime Minister Tony Abbott, wanting to get rid of the targets all together. A number of changes to the NEG were announced on Monday 20 August, 2018. These changes include providing additional controversial powers to the ACCC where they will...