Powering business market report

October 2018

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


In Origin news

Origin has launched a new broadband service – adding to the expanding range of home products and services that it already provides to millions of Australian homes including smart home solutions, electricity, natural gas, solar, and LPG.1

Why renewables are cheaper than coal

Greg Jarvis, Executive General Manager, Energy Supply and Operations

Listen on Energy Insiders


The electricity market this month

OCT18%20elec%20prices

Mike Capel, Portfolio Trader, Trading and Operations

Loads across the NEM decreased into October reflecting a typical shoulder period. Average spot prices did however remain elevated driven, in part, by low hydro generation because of ongoing drier conditions and multiple baseload units on planned maintenance. Low wind generation in the back half of the month also contributed to some price uplift. There were no high-priced events where prices settled materially >$300 during the quarter.

 


Electricity news headlines

photo tall bungala solar farm 2018 11 01

(Above) Bungala solar farm in South Australia

October 4: New solar projects; Bungala in South Australia, Bannerton in Victoria and Colleambally in NSW have connected to the National Electricity Market to deliver a combined output of 370MW to homes and businesses.1 Bungala is one of a number of Origin solar projects 2 and with the operating capacity of 220 MW, it is Australia’s largest solar farm completed to date with the potential to power more than 95,000 homes. 

October 10: AFR Energy Summit 2018 was held in Sydney.3 Attendees included Australian Competitor and Consumer Commission (ACCC), Australian Energy Market Operator (AEMO), Australian Energy Council (AEC), as well as energy producers, retailers and users. Origin CEO Frank Calabria presented his views on the energy market over the past 12 months and the support of key issues such as transparency in pricing and discounting off unanchored pricing.4

October 23: Federal Treasurer Josh Frydenberg and Energy Minister Angus Taylor announced the introduction of a “default” electricity tariff to replace standing offers.5 The Australian Energy Regulator (AER) will determine a default offer price to apply to each network, including a “reference bill amount” for each region so consumers can compare electricity rates easily.


“I believe the best way of achieving a long-term, structural reduction in energy prices is increasing supply and delivering reforms across the supply chain, including removing subsidies that are adding to the bills of those who receive zero benefit.”

Origin CEO Frank Calabria's speech to the AFR Energy Summit 2018


Gas market update

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Louise Colbran, Portfolio Trader, Trading and Operations

For most of the east coast, October was much wetter compared with September. Temperatures remained above average for most of the east coast and gas market demand levels dropped. Pool prices are still around the mid $9/GJ on average.

Iona Underground Storage Facility had a two-week maintenance outage meaning that summer refill was limited. Inventory increased by 1.2PJ across October up to 10.6PJ total.


Gas news headlines

October 2: As a measure to improve the transparency of gas prices, the ACCC have commenced the publication of LNG netback prices on its website. The LNG netback price is the price that a gas supplier can expect to receive for exporting its gas. Among other factors, it can influence the price of domestic gas prices in the east coast market.7


Renewable market update

OCT18%20LREC%20prices

October 2: Origin will supply solar power to 20 Sydney local councils in a new renewable energy agreement that will meet up to 35 per cent of their demand. Origin will also firm the solar with power from other sources such as peaking gas-fired power stations, making sure the councils have reliable supply when the sun goes down.9

October 16: The Australian Renewable Energy Agency (ARENA) announced the build of a Business Renewables Centre, encouraging Australian businesses to use renewable energy.10 The centre will be an online marketplace to purchase renewable energy through corporate Power Purchase Agreements.

October 26: Woodside announces their Greater Western Flank Phase 2 Project, located off the north-west coast of Australia has commenced gas production.11

October 29: Origin Energy’s proposed expansion of the Shoalhaven pumped hydro scheme will progress to a $5 million feasibility assessment, after receiving part-funding from ARENA.12

 


“This is a strong prospect for future expansion, because Shoalhaven can feed electricity into the grid in as little as three minutes…”

Greg Jarvis Executive General Manager, Energy Supply and Operation

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