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Every month, we'll share our views on the energy market and outline the headlines that may impact the supply and price of energy.

January 2018

Electricity market update

7/1 Sydney’s hottest temperature since 1939 was recorded in Penrith with a reading of 47.3 degrees. Multiple localized outages occurred due to high demand affecting 14,000 customers.1

15/1 Loy Yang B power station in Victoria transitioned from ENGIE in Australia to new operators Alinta Energy.2

19/1 One of the two units of Loy Yang B went offline for approximately 90 minutes due to the state’s hot weather and subsequent high demand for electricity.3 The 1100MW Loy Yang B, generating close to 20 per cent of Victoria’s energy needs, caused the near instant loss of 530MW of capacity, impacting prices in Victoria, with some impact on NSW, Queensland, and Tasmanian prices.

28/1 AEMO reports record demand levels in Victoria at 7:30pm on Sunday 28th January as temperatures soared over 37 degrees. Demand rose to 9144 MW, causing outages from network interruptions, affecting over 60,000 Victorians.4 The impact on prices in Victoria and South Australia from December 2017 is reflective of the demand surge.

Gas market update

Gas market prices were higher than last month, and higher than January last year: VIC DWGM 6am cleared price was $7.70 Jan 2017 compared to $8.90 Jan 2018. This seems to be a result of Longford production reducing since Jan 1 in line with Esso/BHP’s announcement of 70-80PJ less production this year in AEMO’s Gas Statement of Opportunities (GSOO). December's average production for Longford was 850TJ/day, January average production was 600TJ/day.

Weather in SA and VIC have driven higher gas demands for Gas Powered Generation (GPG) in both states with the closure of Hazelwood.

Iona Underground Gas Storage facility inventory seems to have plateaued around 18.5PJ; relatively full for this time of year.

30/1 The Commonwealth Government released a report prepared by Oakley Greenwood examining gas price trends. The report finds the easing of gas prices in 2017 relative to the 2016 peak and the shift in gas market dynamics which now sees the delivered price of gas increasing with distance from Queensland. The report cites improved pipeline access and the maturing of wholesale trading markets/arrangements as two issues that could assist with putting further downward pressure on prices.

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Renewable energy update

11/1 Territory Generation, the Northern Territory (NT) Government-owned corporation has released an expression of interest for a 25 to 45 MW battery, less than half the size of the recently launched Tesla 100 MW battery in South Australia.5

23/1 An update on Large-scale generation certificate (LGC) was released by the Clean Energy Regulator. It is expected that the 2020 Renewable Energy Target will now be met with more than 6500 MW of new capacity, 500 MW more than previously stated.

25/1 AusNet Services secures agreement with Pacific Hydro to develop a new transmission connection for the 80 MW Crowlands Wind Farm project in Victoria.

29/1 Origin enters into an arrangement with University of New South Wales (UNSW) and Maoneng Australia to provide UNSW tailored electricity supply. Under the arrangement, the UNSW has executed a 15-year power purchase agreement (PPA) with the 200 MW Sunraysia Solar Farm, with Origin supplying a “firming solution” to manage the intermittency of solar.7

Chat to us about PPA and renewable opportunities for your business. Email businessenergysolutions@originenergy.com.au.

What does all this mean for your business?

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