The national wholesale market has taken a significant drop over the last three months. Why is this occurring and what can we expect in the next few months as the country grapples with COVID-19?
One reason the market is falling is due to the fall in oil prices. All the LNG plants in Queensland are putting more gas in the domestic market as they can make better money in Australia than shipping it to Asia. This in turn makes running gas power stations cheaper. Similarly, more coal is staying in Australia and thus reducing costs with more coal running.
If we look to countries overseas, we’ve seen the face of energy change as a result of tighter lockdown measures during COVID-19. In Italy, when they went into full lockdown, production in the north fell and energy use plummeted. If that were to happen in Australia, we could see prices fall even more. If hot spots or major cities go into further lock down, it will have an impact on the market. There are likely generators offering a low price now to lock away something at some value just in case we go to full lockdown and the market is in huge oversupply.
If there aren’t any increased lock downs we believe the low oil price will keep prices low as we head into the winter, then the market will change again.
Wholesale power is up to 40% that it was December 2019 which suggests it’s a great time to lock down your energy rates before the economy switchest from lock down to rebuild.
The latest energy news from around the country:
Solar Farm in regional Victoria to power 71,500 homes
Located at Sebastian, about 20 minutes drive north of Bendigo, construction of a 200 megawatts solar farm is due to commence with a view begin operating in late 2021. It will be capable of powering 71,500 homes and will save roughly 421,000 tonnes of carbon dioxide emissions per year which equates to taking about 90,000 vehicles off the road.
NEW SOUTH WALES & ACT
NSW makes energy a priority
The NSW Government has unveiled its plan, Net Zero Plan Stage 1: 2020-2030, to boost the economy, create 2,400 new jobs and reduce emissions by 35% over the next ten years. The $11.6 billion plan, which is focussed on impacting climate change, will support a variety of electricity and energy efficiency initiatives including coal innovation, electric vehicles, hydrogen and carbon financing. The goal is to support businesses in modernising to increase productivity at their plants and give farmers access to much-needed environmentally and financially sustainable technology.
Relief package for QLD households
The Queensland Premier, Annastacia Palaszczuk, has announced the state will invest a further $4 billion in a move to support the health and job security of all Queenslanders. “To date, this is the biggest single relief package assembled by any state or territory,” the Premier said. “Our $300 million household relief package will give Queensland households $200 off their utility bills, building on the $50 asset dividend we have already announced.
Battery Scheme for South Australia
South Australia’s Home Battery Scheme is aimed at providing households with cleaner and more reliable power sources. The scheme, which is due to drop the level of subsidies for households investing in a battery on 15th April 2020, will give households access to $100 million in subsidies, plus an additional $100 million in loans. The installation of such storage devices is expected to reduce the demand placed on the grid today (particularly in peak periods) which should, in turn, reduce the price of power for the entire state.
Aurora provides bill relief for impacted homes and businesses
Tasmanian energy retailer, Aurora, is helping residential and small business customers impacted by the COVID-19 pandemic with the establishment of a $5 million support fund. Support includes waiving of fees, bill relief, payment plans and freezing debt. In addition, last Thursday, the state government announced a 12-month price freeze on energy bills. Rebecca Kardos, Chief Executive at Aurora, commented "These are extraordinary circumstances, but Tasmanians can be assured we're doing and we'll continue to do what we can to help our customers and our community through these tough times,"