Out of the frying pan and into the fire: If the last two years hadn’t been challenging enough, the east coast of Australia is now on an unprecedented precipice of rising market costs.
Combined with international conflict, extreme weather events and industries continuing to heal from lockdowns and labor shifts, the announced closure of two of NSW’s largest power stations is setting up for some seriously volatile times ahead. Anticipated, as we say, because we are seeing the beginning of them now.
Read on to learn more about what we anticipate in the coming months for each state.
While presently steady, the scars of Victoria’s past have come back to haunt neighboring states. The planned expedited closure of Liddell and Eraring power plants for some will call to mind the 2017 closure of Victoria’s Hazelwood power station, which took 20% of the state’s power offline without a continuity plan settled. The result? An eye watering 85% jump seen in spot prices across the state.
By comparison to its black coal siblings Queensland and New South Wales, Victoria is so far seeing a moderate rise, certainly less of a pinch but a steep increase from the pandemic drop we saw in 2020. Something to keep in mind for Victorian businesses is the impact of energy redistribution in the coming years, with all remaining brown coal power plants anticipated to close between 2026 and 2032.
With less eye-watering wholesale costs, the Victorian market may remain open for competitive agreements. We recommend getting in touch with your Choice Energy specialist to check in on your current agreement, any forward contracting opportunities, or to find out more about metering and monitoring to ensure your energy spend is optimised and correct.
NEW SOUTH WALES
Hammered by unrelenting storms and the ongoing challenges, plenty of NSW businesses have had their fair share of challenges and unanticipated costs already. Struck with the news of the state’s largest energy power station early closure, the market has responded quickly, anticipating the jump in wholesale power price in advance. From the mouth of one of our own senior strategists: A rise we have not seen in nearly a decade of brokering!
Amongst clear electrical anxiety, gas prices have begun an upwards trend. After all, where electrical outages threaten, gas may be brought in to cover the gaps. Learn more on global gas trends here.
With no relief on the horizon for this major state, we highly recommend you get in touch with our energy team to investigate some preventative strategies in the future, including forward contracting and ensuring your agreement periods are optimised and noted.
For southern Queensland businesses within the National Energy Market, a problem shared would usually be halved. Not so for the sunny state unfortunately - As the Liddell power station closure looms closer, Queensland prices have begun to rise, thankfully in a slow pitch to neighbouring NSW. Less exposed to spot prices than NSW and VIC, and with more capacity to weather the storm, changes may take place at a more reasonable pace.
Consider this instead an early warning for savvy business looking to maintain their edge: The trend remains consistently in favour of incoming higher prices, but with more time on your hands to seek out procurement options, or make the most of theInstant Asset Tax Write Off scheme and take control with commercial solar, your options are open when it comes to getting ahead and reducing your risk.
The lucky south continues to see lower electricity pricing, with only moderate increases anticipated in the future. Despite continuing battles between Basslink and Hydro Tasmania, the government assures that the state’s energy security remains “stronger than ever”.
On the flipside of broken relationships, the continued strategic partnership between Hydro Tasmania and the Bureau of Meteorology continues the state’s investment into climate and energy. “The services provided by the Bureau enable Hydro Tasmania to better supply energy to Tasmanian households and businesses as well as into the national energy grid,” Dr Johnson, CEO of Hydro Tasmania, has said.
Optimisation is optimisation: If you are a Tasmania based business dedicated to remaining competitive, ensuring your energy bills are as low as possible is an ideal way to cut thousands. For Choice Energy customer Tasmania Castings, energy procurement alone saw a saving of $65,000 over a two year period. Read more about their case study here.