Queensland has faced logistical challenges in coal transportation due to recent flooding, impacting coal supply chains. Over the past three months, the state has relied on coal for 71% of its electricity generation, raising concerns about baseload generation stability and associated costs. As a result, wholesale electricity prices have increased by 18% in the last five months, climbing from $96/MW to $113/MW.
New South Wales has benefited from strong renewable energy generation, which has kept electricity prices relatively stable over the summer. However, there are concerns about potential price increases as other markets begin to draw on NSW's supply. A key risk is the state following a similar trend to last year when prices rose from $99/MW to $139/MW between March 1st and June 1st.
Both Victoria and Tasmania have experienced strong renewable energy generation, surpassing last year's levels. This has helped keep wholesale electricity prices relatively low. However, there were small price increases over summer due to higher-than-usual baseload generation costs.
Unlike previous summers, South Australia's electricity prices have not seen the usual seasonal drop. The state, which typically generates nearly 70% of its power from renewables, has recorded a 10% decline in wind and solar generation compared to last year. As a result, prices have remained stagnant, with expectations of an increase heading into winter. Gas currently accounts for 31% of South Australia's electricity generation, and with the gas price cap set to expire on June 30, 2025, there are concerns that pricing could rise, particularly with increased winter demand.
Gas prices have remained stable at around $15/GJ for the past few months, with minimal external influences affecting the market. However, all eyes are on the gas price cap expiration on June 30, 2025, which could lead to either an increase or decrease in pricing. If gas becomes scarce and unaffordable once the cap is lifted, prices could rise. Conversely, opening the market to lower-cost gas sources could drive prices down.
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