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 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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The Retail Market July and August 2019


  • Retail prices for Commercial & Industrial customers moved up a little in Victoria towards the end of the period and were relatively stable in the other NEM states other than for South Australia which experienced a transient increase of around 1c/kWh before returning close to its previous level.
  • The price increase in Victoria was due to the announcement by AGL that one of its Loy Yang A units (550MW) would now be unavailable until the end of December, several months longer than expected. Also, an accident at Origin Energy’s Mortlake station has made a single unit (292MW) unavailable again until the end of December. Whilst these units should be back for the start of the 2020 Summer any further delay or supply side reduction has the potential to move the market in Victoria significantly upwards, and the retail price increase that we have seen is in anticipation of this.
  • Prices in Victoria remain vulnerable to more “bad news” shocks and the likelihood of further increases we believe greatly outweighs the likelihood of any sustained decrease over the remainder of this calendar year.
  • For the other NEM states where retail prices have been fairly stable we also believe that the risk of upward movements is greater than that of a decline as interconnection tends to transmit price movements from one state to another and also as the generator reserve margin for both South Australia and NSW is known to be tight going into the Summer. 
  • Large scale certificate prices remain around the $40 level, being supported here for the time being by slippage in commissioning of new utility scale renewable projects. However, we continue to see the market for forward delivery of large scale certificates trending down to the low teens for early 2022 deliveries.