Market observations for Q4 2018: AEMO’s latest QED report

3 min

AEMO’s latest Quarterly Energy Dynamics Report covering Q4 2018 continues to illustrate the rapid pace of change occurring throughout the energy sector.

The report provides energy market participants, businesses, consumers, governments and other interested parties with information on the market dynamics, trends and outcomes during each quarter.

AEMO’s analysis reveals that wholesale electricity prices in the National Electricity Market (NEM) remained at comparatively high levels for the year. The factors contributing to these prices included comparatively high gas prices, which resulted in gas-powered generators setting the price more often and at higher levels, as well as the structural shift of offers from black coal-fired generators to higher prices over a longer term between 2014 and 2018. These factors were somewhat offset by the addition of 800 megawatts (MW) of variable renewable energy during the quarter, bringing total installed renewable energy capacity for 2018 to 3,000 MW.

High wholesale electricity prices, together with reduced availability from the Longford gas facility and record liquefied natural gas (LNG) deliveries, contributed to the highest quarterly gas prices on record, up 43% from the same time last year.

The power of customer choice and impact of new technologies continues to affect energy usage patterns, with the NEM recording its lowest operational demand since 2002. The South Australian region most clearly demonstrates the impact of increasing rooftop solar uptake, setting a new all-time minimum demand record of 599 MW at 1300hrs on 21 October 2018.

These impacts are not limited to the NEM. Over on the west coast, the Wholesale Electricity Market (WEM) also recorded its lowest operational demand for 2018 at 1,199 MW, and one of the lowest of all time.

Contrary to the east coast, during the quarter, average wholesale electricity prices in both the Balancing Market and Short Term Electricity Market (STEM) decreased compared to Q3 2018 and Q4 2017. This was primarily due to lower average demand, higher mid-merit generator availability and participant bidding behaviour.

To learn more about the trends and dynamics of our evolving power system, read the full report.


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