
TTEG COMMENTARY
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Futures pricing trends have recently softened due to stable generator performance, despite low solar and wind outputs. However, higher risk premiums have been factored in following warnings about future gas supply shortages.
As winter ends, futures are expected to ease further with anticipated improvements in renewable generation. It is important to account for ongoing increases in fuel costs and prepare for potential volatility.
Energy strategies should remain adaptable, particularly with the expected higher renewable outputs in summer, and careful monitoring of baseload generation’s performance in warmer climates is recommended.


WHOLESALE MARKET UPDATE
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Futures pricing across all NEM states has eased over the last month on the back of consistent generator reliability. While solar is at seasonal lows and all-time quarterly lows were just recorded for wind harvest nationally, no major planned or unplanned outages have blessed the market with unusually reliable baseload supply during these higher demand months.
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However, pricing in general now continues to reflect higher risk premiums priced into the outer years, after the market operator’s recent update to their National Gas Outlook, warning of more widespread and more frequent gas supply shortfalls in all NEM states from 2025 – 2028 than had originally been forecast. As we near the end of winter, futures pricing is expected to ease as climates again become drier and milder and renewable generation ramps up again, particularly wind harvest and grid-scale solar.
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Despite broader generator availability, the cost of each fuel source has continued to increase since the start of the year, with batteries, renewables, coal and gas all continuing their uptrend over the last month.
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Futures markets appear to have peaked at the end of Q2-24, on the back of historically low wind harvest, seasonally low solar generation, transmission and interconnector constraints as well as the National Gas Outlook update painting a more dire picture for gas futures in all eastern NEM states.
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In more recent weeks, however, wind generation has increased significantly with solar picking up marginally. This has calmed spot price volatility as grid frequency has stabilised, and the efficiency of FCAS (Frequency Controlled Ancillary Services) has become apparent, with the market operator able to switch on various forms of backup energy storage where and when required.
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Anticipation from here is for futures to continue to ease coming in to summer on the back of far higher wind and solar generation – assuming baseload generation can withstand the warmer climate.
ELECTRICITY FUTURE PRICING CHARTS
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The Australian Energy Market Operator (AEMO) released a Quarterly Energy
Dynamics Q2 report in July 2024, covering the changes in price and demands in the National Electricity Market (NEM), Wholesale Electricity Markets (WEM) and east coast gas markets and their drivers between the period of 1st of April to 30th of June 2024.
In Q2 2024, wholesale electricity prices across the National Electricity Market (NEM) surged to an average of $133 per megawatt hour (MWh), a 23% increase from the previous quarter. This rise was driven by low wind and hydro generation, leading to greater reliance on gas and black coal, particularly impacting South Australia, Tasmania, and Victoria. Conversely, Queensland saw a 20% price drop due to more zero or negative price intervals. Gas prices on the east coast averaged $13.66 per gigajoule, reflecting a slight increase from earlier in the year, while Western Australia benefitted from stable energy prices due to increased renewable generation despite a slight rise in demand.


NSW Energy Initiatives
$2.5B investment in NSW renewables
AEMO Services has unveiled the recipients of its inaugural tenders under the New South Wales Electricity Infrastructure Roadmap, allocating $2.5 billion to renewable energy projects that will contribute 1.4 GW of new capacity.
This includes ACEN Australia's solar farms in the New England and Central West Orana zones, Goldwind Australia's Coppabella Wind Farm, and RWE Renewables Australia’s long-duration Limondale battery storage system.
With these projects, New South Wales has achieved one-third of its 12 GW renewable energy target for 2030, aiming to replace retiring coal-fired power stations and reduce carbon emissions by up to eleven million tonnes over 20 years.
The investments are expected to support around 3,300 jobs and are set to be operational around 2025-2026, aligning with the anticipated closure of Eraring Power Station.
PPA initiative for NSW councils and businesses
The NSW Government has launched a program to help businesses and councils in Renewable Energy Zones (REZs) save money and meet net zero targets by partnering with the Business Renewables Centre Australia (BRC-A).
Managed by EnergyCo, the initiative provides education on power purchase agreements (PPAs) with renewable energy generators. Workshops and information sessions are underway in regions like Central-West Orana, Hunter-Central Coast, and New England.
The program aims to equip participants with the tools to secure long-term renewable energy supplies. More details and registration are available below.
Renewable Energy Transformation Agreement
Signed by SA & WA
South Australia and Western Australia have each signed Renewable Energy Transformation Agreements with the Federal Government, securing significant investment for clean energy infrastructure.
South Australia will receive funding to develop 1,000 MW of new wind and solar projects and 400 MW of additional storage, aiming for 100 per cent renewable power by 2030. This agreement supports the state's Hydrogen Jobs Plan and establishes a specific grid reliability mechanism, enhancing community engagement and increasing First Nations participation.
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Western Australia, the latest to sign, will receive support to build a minimum of 6.5 TWh of wind and solar projects and 1.1 GW of new storage. This agreement aligns with Western Australia’s commitment to retire state-owned coal-fired power stations by 2030 and ensure a stable, affordable, and reliable renewable energy supply.
Both states are part of the Federal Government’s broader plan to deliver 32 GW of new renewable generation and storage by 2030, addressing barriers in project delivery and promoting practical actions for community and economic benefits.
Federal Minister for Climate Change and Energy Chris Bowen and Western Australian Minister for Energy, Environment, and Climate Action Reece Whitby emphasised the importance of these agreements in providing clean, reliable energy and fostering economic growth.


Energy Projects in Victoria
Victoria Invests $480 Million to Boost Renewable Capacity
As part of a $480 million investment in Victoria's energy grid, the Koorangie Energy Storage System has been equipped with 100 Tesla Megapacks to boost energy storage and renewable capacity in the Murray River region by up to 300 MW.
Funded through the Victorian Government’s Renewable Energy Zone Fund, this 185 MW storage system, set for completion in 2025, will provide significant backup power, potentially supporting all homes in Gannawarra Shire for over 14 days or Kerang for over 30 days on a single charge.
It will also employ grid-forming inverters to enhance grid stability and replace fossil fuel services, aligning with Victoria's targets of 2.6 GW of storage by 2030 and 6.3 GW by 2035.
Gippsland, Victoria declared offshore wind area
The Gippsland Offshore Wind Zone is set for major expansion following the Federal Government’s approval of feasibility licences for twelve proposed projects, including six major developments such as Navigator North (1.5GW) and Aurora Green (3GW).
These projects, which could collectively generate up to 25GW, will undergo environmental assessments and community consultations before construction. The licences allow developers to perform necessary studies and engage with stakeholders to address barriers in renewable energy development.
Industry leaders from companies like Origin, RWE, and Iberdrola have pledged to advance the offshore wind sector, aiming to boost Australia’s renewable energy targets and create local jobs.
Energy Projects in Western Australia
Approval Granted for WA Battery Project
Alinta Energy has been approved to build a 300MW battery at its Wagerup site, complementing an existing 100MW battery under construction. The new battery will support Western Australia's integration of solar and other renewable sources, enhancing network stability and security.
Expected to be completed by October 2027, the project aligns with Alinta’s sustainability goals by providing reliable, lower-emission energy and addressing the growing need for dispatchable energy sources.
Infradebt Funds Frontier Energy's Waroona Project
Frontier Energy has secured a $215 million senior debt mandate from Infradebt for Stage One of its Waroona Renewable Energy Project, which includes a 120MWdc solar farm and an 80MW/360MWh battery storage system.
The agreement features a 17-year debt tenor and a repayment structure designed to maximise the project's economic benefits. Infradebt will also partner with Frontier for future battery projects. Infradebt, known for financing renewable energy initiatives, was chosen for its competitive terms and flexibility.


New Roadmap for Consumer Energy Resources (CER)
Energy Ministers have unveiled the CER Roadmap, aimed at scaling up consumer energy resources across Australia.
Announced at the Energy and Climate Change Ministerial Council meeting, the roadmap outlines priority reforms across four areas: consumers, technology, markets, and power system operations. It aims to maximise the benefits of consumer resources, potentially reducing the need for costly grid-scale investments.
Victorian Energy Minister Lily D’Ambrosio and Federal Minister for Climate Change and Energy Chris Bowen emphasised the roadmap's role in transforming energy use in homes and workplaces, driving savings for consumers, and integrating new technologies.
Industry leaders welcomed the reforms, which are expected to address issues such as high bills and improve consumer control over their energy resources.
New Electricity Tariff from 1st of July 2024
A large portion of your electricity bill is the network component, which is charged from the electricity distributor for the supply to your site. The network charges are based on the distributor’s tariff and the site’s electricity load and consumption. South Australia Power Networks has multiple network tariffs, for which the pricing is updated annually from the 1st July. If a site’s energy usage or demands change, or the network tariff parameters change, it could mean that you are paying more than what you should be!
There may be an alternate eligible tariff which you can be moved onto, to reduce these charges ongoing. Tariff changes are not applied retroactively, so it's beneficial to switch to a more cost-effective tariff as soon as possible.
We can assist your business by ensuring that you’re on the optimal network tariff and explore other cost-saving opportunities.
