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 August to Mid September

  • Retail prices are little changed over the period with NSW continuing to increase slowly from 7.30c/kWh in mid August to 7.85c/kWh by mid September. In other states prices were largely stable.
 
  • In the wholesale market prices for Q1 2019 and Calendar Year 2019 futures contracts were stable over the period but remain at elevated levels reflecting concerns over generator availability during high demand periods over the forthcoming summer.
 
  • Overall prospects for prices going forward are to continue at or about current levels but with the potential for a sharp break upwards should bad news arrive regarding plant availability for the summer season. Customers with contracts ending up to the end of March2019 should consider this when formulating their purchasing strategy.
 
  • Longer term contracts remain better value than shorter term contracts with the discount for 3 year deals vs 2 year deals hovering at around 0.2-0.3c/kWh. One year contracts are particularly expensive with these commanding premiums of over 1c/kWh compared to two year contracts with this price differential reflecting the elevated wholesale prices for Q1 2019 and calendar 2019.
 
  • We are also seeing a small amount of interest in 4 year deals in NSW out to the end of December 2022 which are showing prices about 0.1c/kWh cheaper than the corresponding 3 year deals.