Market Update May 2022

Below is a lite version of our monthly carbon & energy market update.

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  • AGL closed the first 500 MW unit at Liddell coal-fired power station, with the entire (2,000 MW) facility to close in April 2023.
  • AEMO released an update to its 2021 ESOO report following new information since its initial release in August 2021, such as the earlier closure of Eraring Power Station.
  • Queensland and New South Wales experienced higher volatility due to tight supply conditions, with average NEM spot prices rising 90% month-on-month. All NEM states except Tasmania had record high April wholesale spot electricity prices.
  • LNG netback prices fell by 15% but gas prices rose uniformly across the mainland NEM by 29% or $3.6/GJ over the month.
  • Flat Future prices generally increased with northern states seeing high volatility.
  • STCs continued to remain flat just shy of $40/certificate.

 

  • ACCU prices continue to slide to $27.35/certificate, following their dramatic drop last month.

  • LGCs saw little price movements, with later vintages Cal24 and Cal26 seeing minor changes.

Feature 1: North-South Separation of Energy Prices

The north-south divide in energy pricing has become more pronounced. The two states dependent on black coal – Queensland and NSW – are seeing higher wholesale prices than the southern NEM states where renewables and/or brown coal have a greater share of the domestic energy mix.

Feature 2: AEMO Quarterly Energy Dynamics Q1 2022

AEMO’s Quarterly Energy Dynamics Q1 2022 was released in late April. The quarter saw average NEM spot prices rise to $87/MWh, up 67% on Q4 21 and up 141% on Q1 21. This was caused primarily by higher input fuel prices, higher operational demand, and increased price separation between NEM regions (discussed in Feature 1).

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