A typical October day
Before we look at prices across the states, let’s look at a typical day this October compared to the last three years.
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As you can see, pricing during a typical day has changed over the last three years.
Today it is more varied with higher prices in the morning and late afternoon – and significantly lower prices in the middle of the day and late at night (consistent across most of Australia).
Accordingly, businesses that have flexibility in their load could reduce their electricity costs significantly.
For example, an irrigator may be able to avoid pumping in the morning and late afternoon and pump as much as possible between 1am and 5am. This could make the difference between paying 1.8 c/kWh compared to 7.8 c/kWh during the same day.
September and October saw very low wholesale prices compared to August, with a monthly average of $57.24MWh and $59.26MWh respectively. These lower prices were driven by the following factors:
- Additional generation capacity from the Pelican Point power station
- Lower demands and gas spot prices for power generation due to milder weather conditions
- Default prices for three days following the SA Black System event
Wholesale prices in September were lower than August with a monthly average of $41.05MWh. This was followed by Victoria’s lowest month for the year, with a monthly average $33.18MWh for October.
Lower prices across both months can be attributed to higher amounts of generation that bid in at lower priced bid bands, solid wind resource and milder weather conditions.
New South Wales
Like Victoria, NSW experienced a lower result in September with an average of $44.88MWh. This can be attributed to higher amounts of generation that bid in at lower priced bid bands and milder weather conditions.
However, prices then increased again in October at a monthly average of $55.23MWh. This can be attributed to NSW generator outages resulting in lower market capacity.
September prices in Queensland were the lowest for 2016 so far, with an average of $46.06MWh. The main drivers were lower priced gas, increased output from coal stations bidding at lower price bands and milder weather conditions.
The average in October however, rose to $53.73. This was due to generator outages in NSW and strong LNG demand resulting in gas at higher prices.
Tasmania experienced a slightly higher result for September compared to previous months with an average of $46.18MWh. Solid rainfall continues to result in strong inflows for Tasmania’s previously drought stricken dams.
However, October’s average reduced to $33.22MWh – Tasmania’s lowest monthly result for 2016. This can be attributed to a solid wind generation resource and moderate weather.
November 16 outlook
Wholesale prices across Victoria and South Australia are expected to be fairly mild and better value than what the fixed rate contract market has to offer. However, due to generator outages and weather conditions, average prices in New South Wales and Queensland may edge higher.