Energy Action Price Index

Energy Action Price Index

What happened to electricity prices last month?

 

In the Australian energy market, the forward price of electricity for medium to large users fluctuates from day-to-day. Energy Action’s Price Index (Business) (EAPI) provides clarity to the market encompassing pricing from energy retailers via the Australian Energy Exchange (AEX).

EAPI represents the average commodity price of retail electricity paid by Australian businesses based on a Standard Retail Contract (commences in 6-months and operates for 2½ years). EAPI is created from the lowest cost offers submitted by retailers via the AEX and reflects the cost of commodity electricity to commercial and industrial customers.

For more information about the Energy Action Price Index, read our Frequently Asked Questions (FAQs).

Energy Action has redefined the EAPI for South Australia. From 2 February 2016 onwards the Standard Retail Contract for South Australia commences in 2-months and operates for 1 year. This change has been made to better reflect market conditions in South Australia where contract lengths have shortened considerably since late 2015. This change to the EAPI is limited only to the index for South Australia. Standard Retail Contract definition for all other states remains unchanged.

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The Retail Market in October & Early November

  • Retail prices have been little changed across NSW, VIC and QLD since mid July and continue to trend flattish across those states.

  • In South Australia prices are also currently trending flat having come off slightly and from a very high base over the previous two months.

  • As has been the case for several months, contracts of longer duration continue to be best value with three year contracts selling at a discount of around 0.4c/kWh to two year contracts in NSW and QLD and a larger discount of 0.8c/kWh in VIC. Three year discounts have increased in South Australia from 0.4c/kWh to 0.8c/kWh in line with those for Victoria.

  • Most interest is for 1st January 2018 starts and for contracts of two and three years’ duration with the longest term contracts terminating in December 2020. Little interest is being shown in contracts for only one year’s duration and where it is these are at substantially higher prices than for a two year contract (>1.0 c/kWh).

  • We are not seeing anything pricing out beyond the end of December 2020.

  • The major development over the period was the announcement of a National Energy Guarantee scheme by the federal government.