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 Early April to Mid May 

  • Retail market conditions during the period largely continued the trend of the past several months. Prices in NSW continued to decline slowly but at a faster rate than for any of the other states, shedding 0.55c/kWh from early April to mid May. Elsewhere Victoria was down 0.4c/kWh and South Australia 0.35c/kWh. In Queensland prices were little changed.
  • Term spreads continue to narrow with discounts for 3 year deals versus 2 year deals falling to around 0.1c/kWh for NSW and Queensland and around 0.2c/kWh for Victoria and South Australia.
  • The market continues to trade out to the end of December 2021 in all states although demand for contracts of that length is infrequent.
  • COAG’s decision of late April to seek a final decision on the National Energy Guarantee in August of this year had no effect on retail prices which remained steady at the time of the announcement.
  • Prices for LGCs continue to hold up well at $75-80/certificate for the next two years but forward prices for the following year (2020) remain depressed at around $40/certificate on expectations of an over supply of certificates versus the legislated targets.