Every month, we'll share our views on the energy market and outline the headlines that can impact the supply and price of energy.
Helping to move consumers to active participants
Where we previously paid our quarterly electricity and gas bills, we’re now looking for ways to manage energy more efficiently.
The transitioning energy market means we’re all more involved in energy than we’ve ever been.
What is now evident is the increasing need for consumers of energy to actively participate in the energy market. For businesses and homes alike, consumers can choose to generate their own electricity, decide when to use, how much to pay and even share energy with other consumers.
Information is critical
“Energy illiteracy” is a key finding from a recent report.1 At Origin, we partner with our business customers to ensure we provide relevant and detailed information, along with a range of solutions to help navigate and manage their energy needs.
Lee Stone, Head of Customer Service & Experience, Business Energy & Solar
Through our industry events, such as our customer breakfast series, we run through key market developments that impact supply and price of electricity, natural gas and renewable energy. We provide information about our own services and solutions that might help manage energy better such as Solar, Power Factor Correction and Network Tariff Reviews.
Tools with support
We know there’s a lot of information to navigate.
EnergyLink is our online portal that’s linked to your meters and reports your business consumption across all sites and locations. It provides you and your team a visual representation of how you use electricity, but more importantly with EnergyLink Premium, the team is on-hand to give advice on any opportunities to save energy. They will highlight any anomalies in your consumption and recommend ways to improve processes and your bottom line.
When you partner with Origin, there’s a continuous process we go through to make sure you’re informed. Once we’ve monitored your energy consumption with EnergyLink, we look to improve your energy use through energy-efficient products such as lighting, Power Factor Correction units and Voltage Optimisation. We then look for ways to shift your consumption to cheaper periods, assess your suitability for energy storage or solar; whether it’s installing panels or our product SolarFlex. We’ll look at your pricing and determine whether purchasing your energy over a longer term is advantageous. And we regularly check all the components of your energy bill to make sure the cost you pay accurately reflects your current energy consumption.
There is a lot of information at each step, but we’re here to make sure your business has the tools and the support you need to manage energy better.
The electricity market this month
Mike Capel, Portfolio Trader, Trading and Operations
Colder weather, reduced baseload availability and low wind generation drove higher average settlement prices across June. Early in the month, across NSW there was over 3,000MW of black coal capacity on unplanned outage. With cold conditions and outages, prices spiked to over $14,000 per MWh. Low wind conditions in the last two weeks of June necessitated gas-fired generation to support load, setting marginal prices in the $90 to $140 range.
1/6 The Labor Government will extend Energy Australia’s license for the Yallourn mine to 2051, and the AGL license for the Loy Yang mine to 2065.2 This is primarily to allow for rehabilitation of the mine sites once they are closed and is part of the commitment from AGL and Energy Australia to give at least 5 years notice of the closure of the associated coal-fired power stations. The extension does not allow for the mining of coal beyond the 2032 and 2048 deadlines already in place by the respective companies.
4/6 Port Kembla is the chosen site for Australian Industrial Energy’s LNG import plant. The Port Kembla Gas Terminal is expected to come online by 2020, earlier than LNG import terminal planned by AGL Energy in Victoria's Crib Point.3
5/6 Origin announces the lowering of its electricity prices in Queensland and South Australia, and absorbed an expected 3 per cent price rise in New South Wales.4 Origin is the first retailer to announce its new prices to take effect from 1 July 2018.
6/6 Hydro Tasmania has identified 14 sites for potential pumped hydro storage projects.5 The sites located at Lake Cethana, Lakes Murchison and Margaret, and at Lakes Parangana, Rowallan, Rosebery, Echo and yingina/Great Lake, will deliver 4800 megawatts of power to be exported into the National Electricity Market.
8/6 Five of the six NSW coal-fired power stations reported outages or reduced output due to planned and unplanned maintenance issues. NSW also had three days of demand above the monthly average of 10,550MW with heavy cloud, rain and cold temperatures.6
Those reporting units offline included Energy Australia’s gas-fired Tullawarra power station and Mt Piper coal-fired power plant, AGL's two Hunter Valley stations, Bayswater and Liddell, and Sunset Power's Vales Point.7 The outages were reported to impact a third of the state’s capacity with spot prices spiking to a forecast high of $14,000 in the early evening.8
Only Origin’s Eraring power station, the state’s biggest and most modern, was operating at full capacity.9
Australian Energy Market Operator (AEMO) issued an actual lack of reserve alert at 5.44 pm only to cancel it 23 minutes later after the market responded with extra supply - and demand eased back ahead of the long weekend.
9/6 Tomago Aluminium, Australia's biggest smelter, using approximately 12 per cent of NSW power, curtailed operations because of power shortages across the national electricity market.10
9/6 AGL Energy has followed Origin in announcing household power price cuts in South Australia, Queensland and NSW.11
15/6 The draft Detailed Design of the National Energy Guarantee (Guarantee) was released by the independent Energy Security Board for public consultation. Public submissions on the proposed policy close on 13 July, ahead of a key COAG Energy Council meeting on 10 August.12
Gas market update
Louise Colbran, Portfolio Trader, Trading and Operations
Weather in the eastern states remained warmer than experienced in previous years. This led to a subdued start to winter demands and subdued gas market prices to match.
Some of the reduced gas market demands were offset by a few major coal unit outages and subsequent increase in requirement of Gas Powered Generation (GPG) in the NEM.
Shell-operated QGC had a minor train outage, however they balanced their reduced LNG production with a reduction to one of their gas production fields. This meant minimal impact to the availability of gas in wholesale markets.
22/6 AEMO’s Gas Statement of Opportunities or forecast for annual gas demand and supply was released. It reports on the adequacy of eastern and south-eastern Australian gas markets to supply forecast demand over a 20-year outlook period.13 2019 forecasts lower demand for gas-powered generation (GPG) due to an additional 4,000 megawatts of committed wind and solar.
Renewable energy update
14/6 Construction has begun on the Stockyard Hill Wind Farm, expected to be Australia’s biggest wind farm generating enough electricity to power more than 340,000 households. Origin has committed to a 530 MW long-term power purchase agreement with Stockyard Hill Wind Farm.14 Developed by Goldwind, the project will see 149 turbines provide 530 MW of clean energy.15