Wholesale energy prices rose in northern regions but fell in southern regions, according to the Australian Energy Regulator’s (AER) latest Wholesale markets quarterly report for October to December 2024.
The variation between northern and southern regions this quarter reflected differences in seasonal weather and demand, and interconnector limitations that limited the ability of northern regions to import cheaper capacity from southern neighbours.
By region, compared with the July - September quarter, wholesale electricity prices decreased in SA (60%), TAS (37%) and VIC (54%), largely due to typical changes in seasonal weather and demand.
Conversely, wholesale electricity prices increased in NSW (20%) and QLD (30%). These increases were heavily affected by high price periods that were driven by a combination of factors including low wind conditions and planned network outages.
The reduced availability of coal generation – mostly due to planned maintenance outages – coincided with more volatility in electricity prices across the day, as more expensive fuel types were needed outside hours of high solar generation to meet demand.
Overall, average wholesale electricity prices increased in all regions by between 49% and 134% compared to the same quarter last year, with price outcomes driven by significant coal outages and higher-priced offers, combined with interconnector limitations and more variable demand profiles.
“While wholesale electricity prices ended 2024 high by historical levels, these remain below those seen during the extreme highs of 2022 across all regions,” said AER Board member Jarrod Ball.
There were also several records set during the quarter, reflecting the continued market transition.
“This quarter, solar output reached a record of 14,980 MW on 12 December, minimum daily electricity demand records were set in NSW and SA, and there were a record number of negative-priced 30-minute periods in the National Electricity Market,” Mr Ball said.
More than 2,500 MW of combined new registered capacity entered the market in the form of wind, solar and batteries. While many projects are yet to achieve full output, this represents the highest quarterly new entry of the transition to date.
While spot prices do not flow directly into future retail prices, they do have an impact on forward prices. At the end of the quarter, base futures prices for 2025 dates were generally higher compared with the previous quarter, most notably in NSW and QLD. 2026 base future price movements in each region were similar to, but smaller than, 2025 price movements.
East coast downstream gas market spot prices increased by 8% (to $13.54/GJ) compared to last quarter and by 25% compared to the same quarter last year. Average quarterly prices ranged from $12.26 per GJ in VIC to $14.71 per GJ in Brisbane.
Downstream gas demand fell with the seasonal decrease following winter, however the demand for gas-powered generation in the National Electricity Market was higher than this time last year, particularly in QLD where warmer weather and record-high export demand also put upward pressure on prices.
“To meet this demand, gas flows north to QLD this quarter were much higher than corresponding quarters in previous years and a price gap emerged between the Brisbane and Victorian markets,” Mr Ball said.
Following the depletion of the Iona gas storage facility over winter, gradual refilling occurred during the quarter and reached 15.8 PJ at the end of 2024. These levels will continue to be monitored as it refills ahead of winter 2025.
The AER will publish a report on the October – December high price periods in February.
ENDS
Notes to Editors
Wholesale Electricity Markets Performance Report 2024
In December 2024, the AER published its biennial Wholesale Electricity Markets Performance report outlining key considerations to manage volatility and incentivise investment in Australia’s wholesale electricity market.
The report also provides recommendations for market design as our energy market evolves.
Read the media release and access the report here.