Optimism Is On The Cards For Energy Prices

As Australia heads towards the warmer months, there is plenty to be optimistic about when it comes to energy prices.

Spot prices recently dropped as thermal generators returned to service.

In fact, Australians have seen volume-weighted average spot prices-the median price that a stock is traded at over a specific period-drop by 50 per cent.

However, Australians are still feeling the pinch at the petrol bowser, as the upcoming winter in the northern hemisphere is expected to drive demand for coal and gas exports.

Tony Wolfe is an electric vehicle owner, electrician and senior operator at a coal-fired power station in Victoria.

He recently drove his electric vehicle from Queensland to Victoria. The journey spanned 1,600km but only cost him $156 to charge his vehicle.

"Well over 90 per cent of charging is done at home and if you have solar panels and can charge during the day"-you fill up for free," he said.

On the back of the Federal Government's end to the fuel excise reduction, some prices are expected to climb over 25 cents per litre, according to the Australian Competition & Consumer Commission (ACCC).

Some analysts believe fuel price apps and websites could be the key to finding lower prices, while others want legislative action.

"The fuel excise was merely a temporary band-aid solution...what we really need is fuel efficiency standards," said Dr Jennifer Rayner, who is the Head of Advocacy at the Climate Council.

New South Wales

There was a spike in future contract prices by 31 per cent in August. The price increase is expected at $50/MWh.

The long-term picture is slightly more stable, with $144 and $136/MWh expected in 2024 and 2025 respectively.

Fuel prices also remain high, and motorists are encouraged to shop around to find cheaper prices.

Sydney's fuel price cycles are some of the longest in the country, with a duration of around six weeks.

Victoria

Victoria's 2023 contracts continued to spike to 37 per cent in August to $137/MWh.

Unlike New South Wales, spot prices and long-term contracts remain less volatile.

Renewables are also doing some of the heavy lifting, with 42 per cent of the state's overall power coming from renewables.

"Victoria is leading by example in setting a target for renewable energy storage, which is an essential component of a flexible, reliable and clean energy system," Dr Rayner said.

Wind was responsible for 69 per cent of Victoria’s energy demands on 19 August, when an early morning peak was reached.

Queensland

The sunshine state is looking ahead to the summer months, which are expected to deliver a steady reliance on solar power.

Around 22 per cent of Queensland's energy came from renewables in August. In fact, the Australian Energy Market Operator (AEMO) believes rooftop solar helped Queensland's minimum operational demands hit a new low.

South Adelaide

The South Australian energy market continues to be characterised by looming volatility. The state's 2023 contracts dropped slightly to $154 from a record $165/MWh in June.

The state's renewables were responsible for 70 per cent of the state's electricity. Gas imports filled the remaining gaps (8.3%).

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