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 Mid June to Mid July

  •  Retail prices have ticked up slightly in NSW and Victoria over the last few weeks with the index for NSW increasing from 7.4c/kWh in mid June to 7.55c/kWh by mid July and with the index in Victoria increasing from 8.0c/kWh at the beginning of July to 8.15c/kWh by mid July.

 

  • Prices in other states were flat over the period.

 

  • The modest up-take in NSW and Victorian prices is consistent with increasing prices for Q1 caps on the futures market. That activity is likely linked to a number of factors:
    • Snowy hydro is currently experiencing unusually low water levels due to lower than anticipated rainfall. If this persists through winter and spring, generation from Snowy may be curtailed during the hot summer season
    • The NEM has experienced low reserve conditions during the current winter due to intermittent generation from renewables. This is the first time that these conditions have made themselves felt to any extent during the winter and this is much more likely to occur during the summer
    • Gas prices remain elevated and show no signs of easing, increasing the influence of gas fired generation on electricity market prices

 

  • Longer term contracts remain better value than shorter term contracts with the discount for 3 year deals vs. 2 year deals edging up to around 0.4c/kWh in NSW and Victoria.

 

  • Interest is out to the end of December 2021 in all NEM mainland states. We continue to see very little interest in 1 year deals with 2 and 3 year deals being the preferred contract term.