AEMO Q2 market wrap: demand down, emissions down, generator outages up, gas supply up, prices remain high

09/08/2019
3 min

AEMO’s latest Quarterly Energy Dynamics tracks the continuation of key trends and new records in Q2 2019, highlighting generator outages, weather conditions, distributed energy resources and the arrival of new projects as key drivers of market outcomes for the quarter

AEMO’s latest Quarterly Energy Dynamics tracks the continuation of key trends and new records in Q2 2019, highlighting generator outages, weather conditions, distributed energy resources and the arrival of new projects as key drivers of market outcomes for the quarter.

Wholesale electricity and gas prices remained high compared to Q2 2018, up 8% in the National Electricity Market (NEM) despite a large increase in solar photovoltaic (PV) generation, and 16% across east coast gas markets. Wholesale electricity prices were influenced by a reduction in brown coal – 573 megawatts (MW) less than Q2 2018 due to increased planned and unplanned outages – as well as hydro generation, and higher gas prices.

NEM average operational demand was 362 MW lower than in Q2 2018, with demand reductions across all regions. Factors included increased rooftop PV conditions and mild weather in Sydney and Melbourne.

South Australia set a new Q2 minimum demand record at 1330 hrs on 27 April 2019, when operational demand dropped to 749 MW. At this time, rooftop PV contributed approximately 600 MW of output. South Australia also surpassed its Q2 maximum demand record at 1830 hrs on 24 June 2019, when operational demand reached 2,564 MW.

NEM emissions for the quarter fell to the lowest on record, driven by low brown coal-fired generation, increased variable renewable energy (VRE) output, and lower NEM demand.

Between Q2 2018 and Q2 2019, average large-scale wind and solar generation increased 47%, making up 10% of the supply mix compared to 7% in Q2 2018. Over the quarter, new projects representing almost 1,500 MW of capacity (including 1,020 MW wind and 427 MW solar) came on line, with almost 50% of new capacity located in Queensland.

Q2 2019 east coast gas production increased compared to Q2 2018 (+5%) and Q1 2019 (+5%), resulting in record high east coast gas production over financial year 2018–19. Meanwhile the quarterly-average gas price of $10.48/gigajoules (GJ) in Adelaide’s Short-term Trading Market (STTM) for 2019 represents the highest on record for that market.

Over in the west, compared to Q2 2018, the Wholesale Electricity Market electricity supply mix AEMshowed a 56% increase in wind output, while coal and GPG both decreased by 7%. Compared to Q1 2019, prices in the Balancing Market increased by 3%, while prices in the day-ahead Short-Term Electricity Market reduced by 10%. Additionally, the number of high Balancing Prices increased by 34% with a maximum price of $292.68/MWh.

For more in-depth information and analysis about energy market dynamics, trends and outcomes over the last quarter, download the AEMO Quarterly Energy Dynamics Q2 2019 report.

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