Electricity Market Trends for November 2024
November 2024 saw significant developments in Australia’s energy landscape, marked by market volatility, policy shifts, and infrastructure challenges. While wholesale electricity prices have eased from the extreme highs of 2022, volatility persisted due to a combination of weather conditions, generator outages, and transmission constraints.
New South Wales experienced an exceptionally volatile month, with 50 instances where spot prices exceeded $10,000/MWh and 20 occurrences near the market cap of $17,500/MWh. Victoria also saw a sharp increase in average spot prices, rising from $20/MWh in October to $64/MWh in November, driven by higher reliance on coal and gas generation.
The continued growth of battery storage provided critical grid support, particularly during peak demand hours, while offshore wind development in Victoria and New South Wales progressed further. However, transmission delays in Renewable Energy Zones (REZs) remained a concern, potentially impacting future renewable energy integration.
Natural Gas Market Trends for November 2024
November saw ongoing uncertainty in the natural gas market, with potential supply shortages looming over the east coast, particularly in Victoria and New South Wales. The Beetaloo Basin's gas reserves have been proposed as a solution, but concerns over Indigenous land rights and environmental factors have sparked opposition.
Meanwhile, strong LNG export demand from Asia sustained upward pressure on domestic gas prices. In response, the Victorian government introduced a controversial 300% increase in gas exploration permit fees, which the industry has criticized as a potential deterrent to much-needed investment.
The industry also saw increasing investment in carbon capture and renewable gas alternatives, such as green hydrogen, in an effort to align with Australia’s decarbonization goals while maintaining energy security.
State-by-State Overview
New South Wales (NSW)
- Electricity: One of the most volatile months on record, with extreme spot price spikes due to generator outages and high demand. Reliance on gas-fired power increased as solar output declined in the evenings.
- Natural Gas: Supply constraints and increased LNG demand contributed to price fluctuations. Calls for new gas projects intensified amid concerns over future shortages.
Victoria
- Electricity: Prices surged as reliance on coal and gas generation increased. Wind and solar contributed strongly during midday hours but could not prevent evening price spikes.
- Natural Gas: The 300% hike in gas exploration fees raised concerns about future supply security, with industrial users voicing frustration over rising costs.
Queensland
- Electricity: Prices remained relatively stable, supported by strong solar generation and hydro power. However, demand spikes on hotter days led to short-term fluctuations.
- Natural Gas: LNG exports continued at high levels, keeping domestic gas prices firm. Investment in new supply projects remained steady.
South Australia
- Electricity: High reliance on wind generation led to intermittent price volatility. Battery storage played a crucial role in balancing supply during low-wind periods.
- Natural Gas: Gas-fired generation was critical for maintaining stability, especially during calm weather when wind output was low.
Western Australia (WA)
- Electricity: The independent WA grid remained stable, with ample local gas supply and increasing contributions from renewable sources.
- Natural Gas: Despite increased LNG exports, domestic supply remained sufficient, providing price stability for local industries.
Policy and Regulatory Updates
- Transmission Delays: A key transmission access decision for the South West Renewable Energy Zone (NSW) has been delayed until February 2025, potentially slowing renewable energy deployment.
- Smart Meter Rollout: The Australian Energy Market Commission (AEMC) finalized a rule requiring universal smart meter adoption across the National Electricity Market (NEM) by 2030. This aims to improve demand response and energy efficiency.
- Hydrogen and Renewables Investment: The federal government expanded funding for hydrogen infrastructure, positioning Australia as a leader in green hydrogen exports.
- Gas Market Reforms: Discussions on potential domestic gas reservation policies continued as concerns over long-term supply constraints intensified.
Conclusion
November 2024 underscored the evolving challenges and opportunities in Australia’s energy sector. The electricity market faced significant volatility, particularly in NSW and Victoria, while natural gas supply concerns remained a key issue.
Renewable energy and battery storage continued to play an expanding role in the grid, though infrastructure delays remain a major hurdle. Policy shifts, including smart meter mandates and hydrogen funding, signal a continued push toward decarbonization, but industry concerns over gas pricing and supply security persist.
As the energy landscape continues to shift, businesses must stay informed and adaptable. Austech Power & Gas is here to support clients in navigating these changes, securing competitive energy contracts, and optimizing energy strategies.
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Austech Power & Gas is committed to helping businesses navigate the evolving energy market. Whether you're looking to manage electricity and gas costs, explore renewable solutions, or secure long-term supply agreements, our team is ready to assist. Contact us today to learn how we can support your energy strategy in an increasingly complex market.