Market Update May 2022
Below is a lite version of our monthly carbon & energy market update.
Become a CORE Markets subscriber to access our premium monthly update with detailed price charts, commentary from our industry analysts and full length feature articles.
- 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).
To access the full version of our newsletter with detailed commentary from our expert industry analysts, become a subscriber to our CORE Markets Platform.
Receive our monthly Market Update in your inbox.