THE ENERGY CRISIS – What should you do?
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The east coast energy markets are currently in crisis. Globally, natural gas (LNG) and coal pricing has skyrocketed, in part due to the ongoing conflict in Ukraine, disrupting global energy flows.
On the home front, the supply of coal and solar generation in NSW and QLD is still being impacted by the sustained rainfall and flooding from the La Niña weather patterns. As a result, coal-fired power generators in Australia are operating at a much lower capacity.
Another factor causing electricity prices to dramatically increase is the continued shutting down of generators for both planned and unplanned maintenance, causing a substantial drop in baseload power. In the final week of March, Eraring and Vales Point coal-fired power plants provided last minute notices of planned maintenance for the month of April. Although the plants were shut down at different periods, the National Energy Market (NEM) observed significant decreases in available generation for the month. The short notice of downgraded generator availability for the entirety of April has forced energy prices to ramp up significantly in the months of April and May. As a result, the NEM has required LNG fuelled peaking plants to fill the shortfall in supply, placing further pressure on the already high prices of gas and spot electricity prices.
Therefore, the future electricity wholesale market has been heavily impacted by rising wholesale fuel prices in addition to aforementioned supply constraints. Equally, rapidly rising electricity contract prices have the potential to strain the market position of Australia’s generators as they need to cover their positions, limiting their ability to offer new generation contracts, which can further elevate prices.
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As a result of the incredible levels of volatility in the energy market at this period in time, futures pricing indexes have increased dramatically. Traditionally, forward contracting (price shoring in advance) mitigates future price volatility risk and ensure budgetary certainty as the market transitions away from fossil fuels towards less reliable forms of renewable electricity generation.
Assistance for AHA Members
Trans Tasman Energy Group (TTEG) have worked alongside AHA SA clients for over a decade, helping hotel owners with their energy contracts. Throughout 2020 and 2021, TTEG assisted clients in securing bill relief as COVID-19 impacted the hotel industry significantly.
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How we can help:
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As a Corporate Partner of AHA SA for over a decade, we are here to assist in keeping your energy charges down to a minimum during this challenging and uncertain time.
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We are highly experienced in the hotel and hospitality industry.
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We provide FREE, no obligation, bill assessments of your all current energy charges.
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We are an Independent Energy Consultant working for you at no direct cost.
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We ensure quick resolutions to questions or concerns with your energy retailer.
It is recommended that AHA SA members should engage with TTEG to allow our consultants to monitor the market closely and obtain pricing at the most opportune moment in order to provide your business with the best suited tailored solution, taking into account your individual risk appetite.
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NEXT STEPS
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If you are concerned with the energy price volatility:
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Email or upload your most recent bill below, or
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Contact Steve Malcman from TTEG
P: 08 08 8238 3252 | M: 0426 365 138 | E: smalcman@tteg.com.au