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.
The Retail Market in April and Early May
For the fist time in a long time prices were close to static over the month. Since their all time low of mid-2014 prices had been increasing across all states with the rate of increase quickening from the beginning of this calendar year for NSW, Victoria and Queensland. This long term trend began to ease during the first week of April, particularly so in Queensland where the index slipped below that for Victoria to become the lowest priced state for the first time since the early 2010s. Throughout the remainder of April and into early May the indicies for all states were almost static, easing only very slightly but showing no appetite for further increases at this time.
In terms of duration we continue to see contracts commonly pricing to the end of 2020 in Victoria and Queensland, and occasionally pricing out that far in NSW. April saw the first pricing of contracts to the end of December 2020 in South Australia, although little is available in that state beyond the end of 2019.
Two and three year contracts are the most popular terms for NSW, Victoria and Queensland with three year contracts commanding a discount of 0.80-1.00c/kWh to two year contracts. There is little interest in cover for single years in either of these states. In South Australia one and two year cover is the most popular and, again, with the longer term contract being priced at a discount of 0.80-1.00c/kWh to the shorter term contract.
Over the month of April and into early May the Index tracked as follows:
In NSW the index closed down 0.10c/kWh at 11.05c/kWh.
In Victoria the index closed down 0.10c/kWh at 10.65c/kWh.
In Queensland the index down 0.05c/kWh at 9.90c/kWh.
In South Australia the index closed down 0.10c/kWh at 16.00c/kWh.