Electricity Market Prices – Week ending 12 April 2019

Key electricity market observations for the week ending 12 April 2019:

  • The AEMC released the consultation paper for a rule change request last week on the back of a request from AEMO for a short term voluntary forward market. This request was based on a recommendation made by the AEMC in the 2018 Reliability Frameworks Review on how to integrate more demand response into the wholesale electricity market. The short term forward market will enable participants to contract for electricity in the week leading up to dispatch. The theory behind this change is by allowing the trading of electricity contracts closer to real time, the proposed market could give participants more price certainty and enable more demand response to be integrated into the wholesale market. Under the proposed, the voluntary market would:
    • Be operated by AEMO
    • Facilitate the trading of anonymised short term electricity forward contracts
    • Operate on the Trayport platform
    • Offer a range of standardised contracts
    • Utilise existing NEM settlement
  • Liquid markets for hedging price risk are generally beneficial for consumers. The AEMC highlighted in their recent Annual Markets Performance Review that the increased penetration of asynchronous generation and the retirement of synchronous generators could potentially lead to a reduction in liquidity in the futures market. Creation of new hedging products will inevitably be required as the market transitions to renewable generation. Submissions to the AEMC are due on 23 May 2019.
  • Mainland NEM regions futures softened across the board however volumes traded were generally small and it appears that there is less demand from the C&I market.


New South Wales


South Australia

Source: AEMO / ASX Energy