Wholesale markets quarterly - Q2 2020

Segment: 
Category: 
Quarterly report
Release date: 
14 August 2020

Overview

The AER's monitoring, regulation and enforcement roles will help deliver affordable and reliable energy for Australian consumers. Our quarterly report bridges the gap between our short term and long term performance reports, allowing us to identify significant trends in the electricity and gas markets, and independently evaluate market developments as they emerge.

Key findings

  • Gas and electricity wholesale prices were low in 2019–20.

Electricity

  • 2019–20 average prices were below $85 per MWh in all regions for the first time since 2014–15.
  • A generally mild summer, and more rooftop solar led to lower demand this financial year.
  • Spot prices for fuel inputs for gas and coal generators continued to fall, which was reflected in lower priced offers.
  • 2019–20 highlighted the ongoing transformation of the NEM that is taking place. While coal remains the dominant generation source in from the NEM, 2019–20 saw record high wind and solar output and record low coal output since NEM start.

Gas

  • 2019–20 average prices were below $7.25 per GJ in all regions for the first time since 2015–16.
  • Average 2019–20 gas market spot prices ranged between $5.77 per GJ in Brisbane and $7.13 per GJ in Adelaide.
  • More competition in the gas markets meant cheaper gas travelled to where it was needed most.
  • Record trade in the day ahead auction, established in 2019 to sell unutilised pipeline capacity, allowed more participants to shift cheaper gas supplies from north to south.
  • This increase in trade and competition contributed to lower prices this financial year.