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Energy Action Price Index - Monitor and compare business electricity rates

 

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 1st July 2018 onwards the Standard Retail Contract for South Australia will has been recalculated for 30 months duration commencing in 6 months’ time. This puts the calculation of the South Australian EAPI on the same basis as those for NSW, Victoria and Queensland which remain unchanged. For further information on this change please read our Frequently Asked Questions (FAQs).

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Commentary for Nov & Dec 2019

  • Retail prices for Commercial & Industrial customers have been trending downwards. This has been primarily due to recent market announcements around improved supply conditions in both the short and longer term.  Short term announcements affecting market prices include AEMO’s 60% and 30% probability that Mortlake and Loy-Yang A will not return to service for Q1 summer.

    Longer term announcements affecting prices include the gradual closure of Liddell Power Station and Snowy 2.0 being brought forward to March 2025. AEMO has also secured 125MW of reserves through off-market generation along with demand management programs. This includes 61MW of long notice Reliability and Emergency Reserve Trader (RERT) contracts and 64MW through demand side management. Moreover, AEMO has procured more than 1,500 MW of short and long term RERT agreement across NEM to enter into reserve contracts more rapidly if required.
  • Compared to last summer, generation has increased by 3,700 MW across NEM. The majority of new generation capacity has been solar projects in South Australia and Queensland. We are now seeing consistently low pool prices due to low system demand and interconnect constraints which have isolated Queensland’s excess capacity.
  • While we see limited linkage between prices set in the spot market and prices in the forward contract market, we expect the current downward pressure on prices is the ideal time to go to market for a fixed price contract or procurement auction. Historically, the lead-up to year-end has been a time of increasing prices. Are we seeing the long awaited impact from renewables? Time will tell.
  • We expect prices to increase during Q1 2020 due to tight supply conditions over the coming summer this is coupled with the possibility of extreme heatwaves, a heightened bushfire risk and the deteriorating reliability of ageing coal-fired power stations and longer term prices to continue their downward trend.
  • Large scale certificate spot prices remain around the $45 level over the past month. While there has been an oversupply of LGC, short term buying demand has contributed to upward pressure on the LGC price. Other impacts include lower hydro dispatch, impacting 2019 certificate supplies. According to AEMO, 2019 hydro generation was around 20% lower than previous year. Additionally, the Basslink outage contributed to reduction in Tasmania Hydro generation. This will result in a lower number of LGCs created this year. Increased negative prices have led to higher curtailment of Renewable generation which will also further reduce the expected supply of LGCs.