TTEG COMMENTARY
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As shown in the Wholesale Market Update and the associated charts below, the energy market has eased across all states. However, price volatility remains, primarily due to fluctuations in renewable energy output and scheduled generator outages.
Energy contracting is fundamentally about managing pricing risks. Monitoring the market allows you to secure favourable long-term energy contracts.
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But when is the best time to act?
As we’ve discussed in previous updates, we strongly recommend establishing an Energy Procurement Plan that begins at least 18 months (preferably 2 years) before your current contract’s end date.
The Plan should include ongoing market monitoring, factoring in the operational status of key power stations and other variables, and adjusting energy strategies as needed.
Timing is critical when navigating the energy minefield. Nearing your contract end date during a price spike could lock you into higher rates.
If you don’t yet have an Energy Procurement Plan, are unsure of its effectiveness, or would like advice, we’re here to help.
WHOLESALE MARKET UPDATE
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Overview:
Futures pricing remains delicately poised across mainland NEM as we head into summer 2024. Owners of fossil fuel generation assets have used Spring to shut down a significant portion of the nation’s baseload fleet for scheduled (and unscheduled) maintenance, which remains ongoing in VIC, NSW and QLD in particular until at least December.
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Regional Highlights:
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Victoria: Over the last fortnight there have been unscheduled outages at 3 of Yallourn’s 4 units, while currently only the Loy Yang 4 unit is un-operational. VIC has remained blessed with an abundance of reliable baseload generation coupled with state-wide minimum operational demand records being set on a weekly basis at times. This has benefited wholesale pricing outcomes as the supply-demand equation has remained firmly in the oversupply realm, however SA and NSW have faced recent supply difficulties leading VIC to net export to these states where possible, in recent weeks.
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New South Wales: Futures pricing has remained elevated on the back of the highest percentage of baseload generation in the country remaining offline for maintenance and lower renewable output. A recent severe storm in SA lead to interconnector constraints between SA-NSW and VIC-NSW. It also lead to the market operator warning of load-shedding in south-west NSW as backup diesel generators were deemed inadequate to supply the required region.
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Queensland: The country’s largest solar farm has come online and is slowly ramping up. Recent falls in renewable harvest have been offset by large generation coming back online, however there are still a number of large generators coming offline over the next month for their maintenance.
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Looking Ahead:
During Summer we should expect large-scale solar and wind output to increase significantly, which historically has had the effect of lowering wholesale pricing as less demand is placed on the underlying baseload fleet. However, the bureau’s prediction is for a hotter and drier summer than previous, which can lead to increased supply reliability risk – particularly at times of maximum (summer) demand.
ELECTRICITY FUTURE PRICING CHARTS
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Queensland regional councils and utility companies were not consulted before plans for a nuclear power plant in their area were publicly announced, a parliamentary inquiry has revealed. Despite the lack of consultation, many central Queensland residents, including business owners and farmers, expressed support for nuclear energy, viewing it as preferable to renewables.
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Opinions in the region remain divided. Some fear premature closure of the coal-fired Callide power station, which employs 250 people, while others welcome nuclear power for its potential to replace large-scale renewable projects that impact farming land. Local leaders, including the Banana Shire mayor, called for more consultation and detailed information, particularly regarding costs and international experiences with nuclear facilities. The inquiry will continue with a public hearing in Nanango.
Australia 'wasting' record renewable energy as wind and solar share rises
Australia is facing significant curtailment of renewable energy, with over a quarter of generated wind and solar power being wasted to prevent grid overload.
Recently, New South Wales experienced a record curtailment rate of 27.4%, equating to the output of coal-fired power stations. This issue, driven by warm temperatures and low demand, highlights the growing challenge of integrating renewable energy into the existing electricity system, which remains heavily reliant on coal.
Experts predict that curtailment will continue to rise, with the Australian Energy Market Operator forecasting an average of 20% by mid-century. While curtailment may seem wasteful, it reflects the urgent need for increased energy storage solutions, such as batteries, to effectively manage supply and demand.
As coal plants retire and more renewables come online, there will be opportunities to optimise energy use and improve the efficiency of the electricity market.
Are outdated voltage standards costing your business more than you think? Is your voltage too high? It could be hurting your business!
New research has revealed that many Australian businesses are unknowingly paying the price for outdated voltage standards. Across the country, voltage levels frequently exceed the recommended 230V standard, leading to premature failure of appliances, increased energy costs, and a higher carbon footprint.
Here are some key statistics and why addressing voltage issues is crucial for your business:
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Over 95% of voltage readings in Australia’s National Electricity Market (NEM) exceed the 230V standard, often nearing the old 240V mark, contributing to unnecessary wear and tear on your commercial equipment.
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Maximum voltages recorded are generally towards the upper end of acceptable voltage in all states and distribution network service providers (253V)
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High voltage shortens the lifespan of appliances significantly, with studies showing a 5% increase in voltage halves the lifespan of devices like incandescent lightbulbs and vacuum cleaners. Electronics with sensitive components, such as control systems in washing machines, are particularly vulnerable.
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Cut Costs: By reducing voltage by just 5%, businesses could lower energy usage by 4-5.
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Extend Equipment Life: Voltage management can prevent appliances from failing prematurely, ensuring your investment in lighting, machinery, and IT systems lasts longer, saving on replacement and repair costs.
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Maximise Solar Exports: Excessive voltage can curtail rooftop solar exports, especially when voltage levels hit 253V or higher. Optimising voltage creates room for more efficient solar power exports, enabling you to maximise your investment in renewable energy.
Victoria has already taken steps to address this issue, saving consumers over $13 million annually through improved voltage management. With 3 million tonnes of carbon emissions avoided and 1.5 gigawatts of peak grid demand reduced, the benefits of addressing voltage levels are clear.
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UNSW Voltage Analysis in Four NEM Regions:
Don’t let outdated voltage standards impact your business. Contact us today to learn how voltage optimisation can protect your equipment, lower your energy costs, and support your sustainability goals. Email babedi@tteg.com.au or call 03 9418 3945.
Construction starts on Australia’s fifth largest battery storage system
Construction has begun on Australia's fifth largest battery energy storage system, located six kilometres from Port Pirie, South Australia, and developed by Canadian company Amp Energy.
The first stage will feature a 150 MW / 300 MWh system using Wärtsilä's advanced energy storage technology, with South Australian firm Enerven managing the balance of plant. This system will provide essential grid services such as frequency control and energy arbitrage, utilising Wärtsilä's GEMS digital energy platform for optimised management.
The project is part of Amp Energy's $2 billion Renewable Energy Hub in South Australia, which includes three solar installations totalling 1.36 GW. Amp Energy's Australian President, Daniel Kim, highlighted the project's significance in advancing the region's transition to renewable energy.
This marks Wärtsilä's fifth energy storage project in Australia, reinforcing their commitment to supporting the country’s renewable energy goals.