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SavvyBI & Empower Analytics monthly electricity market report aug 20

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SavvyBI & Empower Analytics monthly electricity market report aug 20

  1. 1. 1 Sep 2020 National Electricity Market August 2020 Monthly Market Report
  2. 2. Aug 2020 Introduction Following another month of COVID-19 restrictions, the National Electricity Market recorded its lowest August energy consumption since 2006 with just 16.7TWh. Lower demand resulted in softening spot prices across all regions of the NEM, except for NSW. Sunny days and windy conditions led to August rooftop solar PV generation at 978GWh and record monthly wind generation for the NEM at 1,991GWh. High levels of intermittent generation contributed to a high portion of negative price outcomes across the NEM. Highlights covered in the “At a Glance” section of the report are: QLD 1. QLD recorded the lowest August average price in 6 years, at just $30.45/MWh 2. Record solar PV generation at 375GWh 3. A record 10% of negative priced half-hour periods 4. High solar generation pushed half hour scheduled demand below 4,000MW to the lowest level in over 15 years NSW 1. Lowest August average spot price in 4 years at just under $50/MWh 2. Record monthly wind generation of 476GWh 3. A record August maximum demand of over 12,000MW. 4. Five NSW wind farms deliver monthly capacity factors exceeding 50% VIC 1. Average spot price was 15% lower than previous month, and lowest August in 4 years 2. Record August maximum demand at 7,828MW 3. Record monthly wind generation of 691GWh 4. Lowest average gas price since 2016 at $4.42/GJ SA 1. Spot price 23% lower than previous month and lowest for August in 6 years. 2. High intermittent generation and curtailment of utility solar generation. TAS 1. Tas Hydro pulls back hydro generation as storage levels drop 2. High levels of intermittent generation and volatile spot prices 2 Executive Summary Gas Market The east coast gas market saw only a marginal increases in average gas prices for NSW and QLD, with a slight softening of prices in SA and VIC. LNG Exports were at the lowest level in over two years with just 1.67m tonnes shipped. Electricity Forward Market Special Features 1. Highlights from AEMO’s 2020 Electricity Statement of Opportunities, the forecasting document that underpins many of the assumptions for the ISP. 2. Our baseload outages report examines the reliability of the NEM’s ageing coal-fired generator fleet. Market News News items for this month relate to: 1. NSW government planning 15 utility battery projects 2. ACCC netback price review reveals overpriced domestic gas 3. The planned Shoalhaven expansion is shelved by Origin 4. AGL and Origin show interest in purchase of Click Energy, with AGL making the acquisition 5. 200MW Sunraysia Solar Farm in NSW delayed by legal battle 6. Renewable developers get cold feet due to increasing market challenges 7. QLD Labor moves scrap feasibility study for coal fired power There was significant movement in the electricity forward market during August. QLD’s Cal-21 forward price increased by $2.48/MWh but continues to offer the cheapest power in the NEM. TAS increased during August to $57.40/MWh, while SA with the largest decrease of $2.38/MWh to $56.22/MWh
  3. 3. Aug 2020 3 Market News Headlines 16 Aug, With a spend of $37.5m and bringing in $233m in private investment, NSW has awarded the first contracts to build massive batteries for its power grid with the rollout of 15 projects across the state. With a completion date between 2021 and 2023 and supporting 260 jobs, the projects will produce up to 170 megawatts of dispatchable energy. NSW to build 170MW mega battery 16 Aug, The Morrison government to continue with plans to extend conditions on gas exporters to ensure lower gas contract prices on the east coast. The ACCC highlighted domestic gas prices ranging from $8-$11 a gigajoule in late 2019 and early 2020 which was only about $1/GJ softer than earlier in 2019 despite the crash in LNG exports. The latest netback price estimate by the ACCC puts that domestic equivalent price at just $2.36/GJ on August 3 whilst spot gas prices in Victoria were $4/GJ with price discrepancy of more than $2/GJ set to last throughout 2020 and 2021 despite expectations of soft LNG prices. Angus Taylor keeps clamps on gas exporters 17 Aug, The Mornington Peninsula Shire council is opposing the proposed plan by AGL Energy to develop Australia’s first LNG import plant in Victoria, claiming it fails to safeguard against significant environmental impacts. AGL’s planned $250m LNG import terminal facility slated for Crib Point was part of their plans to ease domestic supply but failed to win over opponents at both council and community level. AGL setback on LNG plant 18 Aug, A 950 kilometre gas line running between Amadeus Basin, Alice Springs to the Santos Moomba gas plant in South Australia’s north is in the early planning stages. At a cost of $1.2billion, the pipeline link is targeting a final go ahead for construction in the second half of 2021 with gas to flow in the March quarter of 2024. With a projected delivery of 124 terajoules a day of gas or 45 petajoules a year, the project is a joint arrangement between Central Petroleum, Macquarie and Cheung Kong Group. Plans unveiled for $1.2b NT-Moomba gas pipeline 18 Aug, A new $1billion plus 950km gas pipeline, backed by Macquarie, Hong Kong’s CK group and Central Petroleum is hoping to ease an anticipated supply shortfall, flagged for 2024. With new forecasts showing several gas fields could end production from mid 2023 to mid 2024 AEMO this new pipeline could be just the answer. Macquarie-backed gas pipeline to ease supply shortfall 18 Aug, With grid issues curtailing output at its $650m wind farm in Victoria, Tilt Renewables has advised shareholders not to expect any go ahead on new projects. The Dundonnell wind farm is experiencing technical problems preventing it from delivering its 330MW of capacity and cited grid issues as the main factor preventing investment in large scale renewable energy projects in the foreseeable future. No new renewable projects while the grid is in crisis 18 Aug, Australia’s largest power retailer, Origin Energy has shelved a proposed expansion of its Shoalhaven pumped hydro project in NSW after a Australian Renewable Energy Agency study found the project was “not commercially feasible” due to commercial risks, higher costs and a hit to revenue from pumped hydro facilities and large batteries. Origin Energy shelves Shoalhaven expansion 19 Aug Fallout from the pandemic has impacted Origin Energy which has suffered a 93 per cent decline in full year profit. With its net profit steady at $1.023b the provider has cited bad debt provisions, write downs and charges as the key areas of concern. Origin Energy profits slump 93 per cent 19 Aug Following criticism by the ACCC that gas providers weren’t passing on lower prices to consumers, the Origin CEO has called for realistic expectations as Australia looks ahead to economic recovery. Citing Origins full year net profit fall to $83m from $1.21 billion in 2018-19, Frank Calabria warned that even with prices of $4-$6 a gigajoule as forecast by a National COVID-19 Coordination Commission taskforce, this will not be enough to stimulate investment in the sector going forward. Don’t expect gas to be cheap, warns Origin CEO 19 Aug Spanish utility, Iberdrola, is flagging its intention to take over renewable energy company Infigen Energy after profit tumbled 91.5 per cent during the 2020 financial year. Although recording a 13.9 per cent revenue increase to $293.2m, profit of just $3.5m was considerably down from $40.9m in the previous financial year. Iberdrola flagging takeover of Infigen Energy 19 Aug With the collapse of oil prices and flagged write downs, Santos was forced to slash its dividend in the first half of 2020 as it recorded a loss of $US289m ($AUD401.9m). Market analysts confirmed the results were broadly in keeping with forecasts although the dividend was at the lower end of the guidance range and somewhat mixed in terms of outcomes. Write downs sink Santos with dividend cut
  4. 4. Aug 2020 4 Market News Headlines 19 Aug, Click Energy, the energy division of Amaysim is rumoured to be up for sale, after generating $153m in revenue in the six months to December with its 201,000 customer base. AGL joined rival Origin Energy in putting up its hand with the acquisition being an easy way to bolster their customer numbers. Imminent sale of Amaysim’s energy division, AGL circles 21 Aug, The $12-17 billion floating LNG facility that is only 3 years old, located off the Kimberley coasts has been in shutdown since February. Billed by Shell as Australia’s solution to remote undersea gas production, its future is now in doubt after failing to reach full capacity with expected exports of 3.6m tonnes of LNG each year. Following three incidents described as “dangerous occurrences” the facility was shut down in February with Shell citing major problems and questioning its economic viability going forward. Shutdown of world’s largest floating LNG factory 20 Aug, Turbulence in the energy markets caused by the pandemic has been felt by New Energy Solar with their stock tumbling seeing them post a half year net loss after tax of $55.6m. Outlining its intention to sell its Mount Signal 2 asset in California the company pointed to the closure of businesses during lockdown and the low levels of economic activity combined with falling electricity demands worldwide, as contributing to their economic woes. New Energy Solar write-downs inflict $55.6m loss 23 Aug, Opponents of Santos’ planned $3.6 billion Narrabri coal seam gas project are calling for the NSW Independent Planning Commission to hire independent experts to assess the project in light of new economic modelling claims by Santos that point to 4 to 12 per cent cuts to gas prices in Sydney from 2025 over 25 years. Opponents attacking the data, point to modelling assumptions that the field is economically viable at a lower production cost of $6.40/GJ and that claims that employment resulting from the project is 78 per cent higher than earlier estimates. Calling for independent verification from AEMO the deadline for the granting planning clearance has been extended to September 30th. Santos’ Narrabri gas price under fire 23 Aug, Suggestions of cheap gas prices to be fed into long term contracts have been dismissed by Senex Energy with its chief executive pushing for $7 to $9 gigajoule long term prices to remain to ensure secure supply. After calls from the competition watchdog to pass on lower gas prices to consumers with a proposed gigajoule rate of $4 to $6 suggested by a National COVID-19 Coordination Commission taskforce, Senex’ response pointed to low prices filtering through in its short term contracts but this was against a backdrop of higher operating costs, restructuring investment and higher depreciation and finance costs. Manufacturers dreaming on cheap gas: Senex Energy 23 Aug, Exxon highlights Victoria’s untapped and undeveloped onshore low cost gas reserves that could provide a glimmer of hope as the state looks to recovery. Suggesting an initial investment of $30m Exxon proposes a new look at Victoria’s untapped gas reserves against the backdrop of failed attempts, political disinterest and investments that didn’t gain momentum for one reason or another. Untapped gas reserves fuel hope of Victoria’s recovery 24 Aug, Delays of 12-18 months are expected for the delivery of the 200MW Sunraysia Solar Farm in south-west NSW due to a legal battle between contractor Decmil and the project owners over responsibility for connection to the grid. Delays for the 200MW Sunraysia Solar Farm 24 Aug, Political battles loom large as Labor attempts to scrap a proposed coal fired power station in northern Queensland. The $3.3 million feasibility study put forward by Shine Energy was unanimously disallowed at a Labor caucus meeting throwing the controversial plan into disarray and creating waves within political circles. Labor leads charge to scuttle coal fired power in QLD 24 Aug, Renewable investment has soured significantly of late driven by the sectors uncertainty and curtailment issues according to data from the Clean Energy Council. Spark Infrastructure reports large scale renewable projects committed in the second quarter of 2020 were the lowest since 2017 after tougher rules on grid connection and a reduction in so called marginal loss factors impacted the sector. Diminished returns for many renewable operators is also contributing to a lack of confidence. Renewables investment facing market hurdles
  5. 5. Aug 2020AEMO ESOO 2020 AEMO releases the 2020 Electricity Statement of Opportunities This month AEMO released their 2020 Electricity Statement of Opportunities. This documents is a forecast of electricity supply and reliability for the National Electricity Market (NEM) for the coming 10 years. Highlights this year’s report were: • Increased uncertainty in demand forecasts due to COVID-19, potential for sustained economical turndown, closures and higher uptake of distributed PV. • The expected reliability outlook has improved for the coming summer 2020-21 and for the following 5 years due to impact of generation and transmission augmentations and lower forecasted peak demand. • The report does, however, highlight the increased level of uncertainty of the reports forecasts due to the current COVID-19 situation and associated economical impacts. • Expected Unserved Energy (USE) is forecasted to remain below the 0.002% threshold throughout the forecasted period, but NSW with the expected closure of baseload power stations is expected to be pushing that threshold towards the end of the forecast period. This outlook has improved due to the augmentation of the QNI interconnector in 2022-23 and the development of a further 900MW of renewable generation. • By 2025, all regions are expected to experience minimum operational demand in during the daytime rather then overnight, particularly in Victoria and South Australia. • AEMO admits that declining minimum demand may lead to challenges in maintaining system strength and inertia. • The report also points out the potential for catastrophic reliability outcomes for NSW if additional investment were not made to replace retiring Liddell capacity and the region were to experience conditions like the bushfires of January 2020. • Due to strong growth in distributed PV capacity during 2019-2020, the 2020 distributed PV outlook is now stronger than the previous 2019 ESOO.
  6. 6. Aug 2020Baseload Outages Coal-Fired Plant Outages A look at the historical coal-fired generator outages reveals QLD as the champion of reliability for the NEM. On average, QLD coal-fired generators ran for around 100 days, while for NSW the average was 72 days and just 43 days for VIC. Tarong and Stanwell are currently the top performing Power Stations with the average days since last outage for their units being 255 and 161 days respectively. Standout units were Stanwell’s Unit 4 and Tarong’s Unit 1, which have been running for more than a year without an outage.
  7. 7. Aug 2020 7 QLD At a Glance ❶ Lowest average August price in 6 years … ❷ Record August Rooftop Solar PV generation ... ❸ Price volatility and record negative prices … QLD recorded the lowest monthly average price for the year to date during August at $30.45/MWh, which was also the lowest average price for August in six years as shown in chart. Low average spot price outcomes in QLD during August were driven by record August rooftop solar PV generation at 375GWh. The high levels of solar PV generation pushed down scheduled demand below 4,000MW, with QLD recording the lowest instantaneous demand since 2004. The high levels of intermittent solar generation led to frequent negative prices outcomes throughout the month as evidence in the half hourly spot price chart for August to the right. The high incidence of solar PV generation during the middle of the day has the effect of pushing the median and average prices down to zero throughout the month. During August, as a result of the high levels of rooftop solar penetration, negative price outcomes were at a record high level of almost 10%. Prices in the $0-$50 price band were also high resulting in almost 90% of half hour spot price outcomes being below $50/MWh. 23 Aug
  8. 8. Aug 2020 8 NSW At a Glance ❶ Observations … ❷ Record wind generation … ❹ Record Maximum Demand for August … The NSW spot price has been slowly climbing over the past months, increasing by almost 4% compared to the previous month. The August 2020 average price at $49.86/MWh remains the lowest for the month in four years as shown in chart. ❸ Wind Farm capacity factors above 50% for August … A record maximum level of wind generation was reach at 7pm on 22 August, when at total wind capacity reached 5196MW. Record monthly wind generation was also reached, with August generation just shy of 2TWh at 1,911GWh for the month. It was also a record month for VIC and NSW with 691GWh and 476GWh respectively. Not only did NSW record maximum intermittent wind generation during August but five of NSW’s thirteen wind farms recorded capacity factors above 50% for the month. Capacity factors for the top 10 performing wind farms during August are shown right. As a reference point for comparison, the average wind farm capacity factor for NSW wind farms during 2019 was 35%. NEM Lowest in 4 years NSW recorded its highest maximum demand for August on record at over 12,000MW on 7 August which was also the equal coldest August day in NSW in seven years with an average temperature of just 13.6 degrees. August’s maximum demand was 4% higher than the same time last year.
  9. 9. Aug 2020 9 VIC At a Glance ❹ Wind farm capacity factors up to 50% during August …❶ Low spot prices … ❸ Record wind generation … The average spot price for VIC fell by more than 15% compared to the previous month to $53.70/MWh and the lowest average price for August in four years. ❺ Lowest average gas price for August since 2016 ... The average gas price in VIC for August was $4.42/GJ, which was the lowest monthly average prices since early 2016. Victoria’s record wind generation during August was also due to exceptionally high capacity factors for the month with the best performing wind farms being near 50% or above. The top ten performing wind farms for August are shown right. As a point of reference the average capacity factor for VIC wind farms for 2019 was 32%. Victoria recorded the highest month for wind generation with 691GWh generated for the month, more than 100GWh more than the next highest month. ❷ Record August Demand …Maximum demand was a record for August at 7,828MW on 4 August when the average temperature for the day was just 5.5 degrees.
  10. 10. Aug 2020 10 SA At a Glance ❶ Observations … ❷ Negative prices … ❸ High intermittent generation … During August SA recorded a high percentage of negative half hour spot outcomes at 7.6% with a further 54% below $50/MWh. ❹ SA forward price softens … SA saw Cal-21 forward price soften by $2.38/MWh during August to $56.22/MWh. The average spot price for SA fell by more than 23% compared to the previous month to $45.57/MWh in August, making it the lowest average price for August in six years.` August 29 and 30 had such a large number of negative priced half hours that it resulted in a negative average price for both days. August 29 and 30 were mild and sunny days with 29 August recording the highest winds for the month and the lower demand at 1pm on 29 August with just 603MW. For both days the Heywood interconnector was exporting around maximum capacity. As can be seen in the chart below, Utility Solar was curtained both days, particularly on 29 Aug which had no clouds cover.
  11. 11. Aug 2020 11 TAS At a Glance ❶ Observations … ❻ TAS becomes net exporter ... ❹ High wind generation … The average spot price for TAS was just 1.5% lower then the previous month at $55.75/MWh. ❸ Hydro generation pulls back … The potential future battery of the nation relied heavily on energy imported from VIC during August. In recent months TAS has been a net exporter of energy to VIC, but the trend reversed during August with a net flow of 115GWh toward VIC. Tas Hydro monthly generation had been close to 1TWh for the previous four months but fell by 28% to just over 700GWh last month. ❷ Storage levels drop … Tas Hydro water storage levels were considerably lower than the same time for the past two years, falling below 40% during the month. Intermittent generation was high during August with Tasmania also experiencing sustained high winds at the beginning and end of the month. ❺ Volatile spot prices …. High intermittent generation throughout the month led to volatile prices during August pushing the average half our price above the median price.
  12. 12. Aug 2020 12 Electricity Spot Price Wholesale electricity spot prices had been steadily climbing over the previous three or four months across the NEM, but last month that trend was stopped short with all regions except NSW recording a significant fall in average spot prices during August. This was driven by strong intermittent generation from across all regions leading to a large percentage of negative half hour spot price outcomes. SA, QLD and VIC had the largest fall in average spot prices compared to the previous month with all three regions recording an exceptionally proportion of negative priced half hours. SA’s average spot price fell by more than 23% to $45.57/MWh, QLD fell by just over 20% to almost $30/MWh and VIC softened by more than 15% to $53.70/MWh. Tasmania saw it’s average spot price fall by just 1.5% to $55.75/MWh while NSW’s average price increased by 4% to just under $50/MWh. The risk-of-change is used to measure the potential price outcome for a relatively small change in demand (i.e. +/-100MW) in all states, except for SA and TAS which is +/-50MW. The risk-of-change in spot prices remains similar for most regions except TAS which is shows an increased risk for high spot price outcomes. QLD shows a slight risk for high spot prices. Historical risk of change is discussed in more depth on the next page. In the intraday spot price profiles to the far right, QLD shows midday spot prices being crushed by solar generation. A similar profile but to a lesser extent can be observed in VIC and SA. All mainland regions show strong evening peak prices. Tasmania’s intraday profile shows significant volatility at all hours during August.
  13. 13. Aug 2020 13 Electricity Market Overview The risk of change is used to measure the potential price outcome for a relatively small change in demand (i.e. +/ 100MW) in all states, except for SA and TAS which is +/ 50MW. As mentioned in the previous page, the risk of change for QLD is showing a slightly higher risk- of-change for high spot prices. NSW, VIC and SA all continue to show a similar risk-of-change for lower price outcomes as has been the trend in recent months. Tasmania in contrast is showing a very high risk-of-change for high spot prices.
  14. 14. Aug 2020Q3-20 Spot Price Forecast 14 The dials to the right compare the current Q3-20 forward price against our spot forecast prepared in Q2-20. The lower and upper extremes of the dark grey area mark the 25th to 75th percentiles respectively, and the median is marked as the break in the dark area. QLD During August, the QLD Q3- 20 forward price remained soft, hovering around $33/MWh where it ended the month, below the 25th percentile of our spot forecast. NSW In NSW Q3-20 forward price rallied during August from a low of $45/MWh to a high of $52/MWh, and then softening to a close of just over $48/MWh, just below the 25th percentile of our spot forecast. VIC The VIC Q3-20 forward price moved between $54/MWh and $58/MWh during August, closing the month at $56.20/MWh, just slightly below the median of our spot forecast. SA During August, the spot price softened from a high of $54/MWh to a close of $50.50/MWh, just above the median of our spot forecast. Q3-20 Flat Swap ($/MWh)
  15. 15. Aug 2020 15 Electricity Demand Total Energy consumption was lower for all regions except for SA where total energy consumption was just 0.6% higher than the same time last year. Total energy consumptions for QLD, VIC and TAS was around 3% lower than the same time last year and 2% lower for NSW. In terms of Maximum Demand levels for August 2020 compared to the previous year, all regions recorded considerably higher maximum demand: • NSW sat a record Maximum Demand for August at 12,000MW and 5.8% higher than the same time last year. • QLD was 3.3% higher at almost 8,000MW. • SA was 9% higher at almost 2,578MW. • TAS 1.8% lower that the same time last year at 1,736MW. • And VIC set a record Maximum Demand for August at 7,828MW and 4.6% higher that the previous year. During the last month of winter, increased sunshine and solar PV generation reduced operational demand during the middle of the day. The two peak period humps have grown substantially, increasing maximum demand for all regions. Exceptional days were: 1. VIC recorded it’s highest demand one Tue 4 Aug (Ochre) 2. Thu 6 Aug (Light Blue) and Fri 7 Aug (Orange) were the two highest demand days for NSW and also outliers for the other mainland regions. 3. Sun 9 Aug (Cyan) and Mon 10 Aug were also days of high demand, the later recording the maximum demand for QLD and TAS. 4. Sat 29 (Dark Blue) and Sun 30 (Dark Purple), the last weekend of August and a particularly warm one, recorded the lowest level of demand for all regions except QLD.
  16. 16. Aug 2020 16 Weather Pattern Average temperatures for August were similar to last year for most regions, with SA and VIC just slightly higher than last year. The demand weighted maximum daily temperature was slightly higher than the previous month at 13.4 degrees. The plot charts to the right compare maximum daily temperatures with daily total energy consumption and maximum demand levels. The distribution of temperatures throughout the month was quite similar to the previous year for all regions with SA and TAS having a couple of warmer days at the end of the month. The charts below on the left show weather dependent energy across the NEM, with SA having the most weather dependent energy. The majority of regions showed significant increases in weather dependent energy during August with VIC (shown below) having the greatest change in weather dependent energy.
  17. 17. Aug 2020 17 Weather Dependency A look at historical weather dependency across the NEM shows that SA’s energy is driven the most by weather, often by more than 20% and particularly during the summer months. SA’s weather dependent energy had remained at a constant level for the previous four months, but increase noticeably in August. VIC, NSW and TAS also showed substantial increases in weather dependent energy during August. QLD was the only region to show a decrease in weather dependent energy as winter traditionally seems to have lower weather dependent energy and usually doesn’t see a rise until around October. Overall, the pattern of weather dependent energy is quite consistent over the years for each region.
  18. 18. Aug 2020Forward Prices 18 In the risk-of-change metrics to the right, QLD and NSW are showing an increased risk-of-change in the forward price compared the previous month, while VIC, SA and TAS continue to show a low risk-of-change. The electricity forward market was a mixed bag during August. • QLD’s Cal-21 forward price increased by $2.48/MWh but remains the lowest forward price for the NEM by a massive margin. TAS also increase during August to $57.40/MWh. • SA saw the largest drop in the Cal-21 price, down $2.38/MWh to $56.22/MWh.
  19. 19. Aug 2020 Generation Mix: During August record wind generation saw wind increase its share in total NEM generation my more than 3% to 11.3% of all generation for August. Residential Solar also saw significant gains, increasing its share of total NEM generation by 1.5% to 5.5%. Hydro generation lost a 1.5% share of total generation compared to the previous month and Gas was 3% less. In baseload share of total NEM generation, black coal’s share dropped by 2% to just under 49%, while brown coal generation increased its share by almost 1% to 16.6% of total generation. Total generation for the NEM decreased during August to 17.6TWh. Baseload generation decreased by 4.5% compared to the previous month on account of a 7% (620GWh) decrease in Black Coal generation to 8.6TWh. Brown Coal generation increased by just over 2% to 2.9TWh. Non-Baseload generation was slightly higher than the previous month increasing by just 32GWh. Wind generation was at a record level during August at 1,991GWh and 43% higher than the previous month’s generation. Residential Solar also increase significantly, up 33.5% compared to the previous month at just under 1TWh, while Utility Scale Solar was up 12% compared to the previous month at 494GWh. Gas and Hydro generation was considerably lower than the previous month. Gas generation fell by almost 30% to 1.4TWh, while Hydro generation was 20% lower than the previous month at 1.2TWh. Outages: QLD had another month of high outages during August with around 1,800-2,000MW of capacity out throughout the month. Stanwell, Callide and Gladstone Power Station all had significant outages throughout August. VIC also had another month of significant outages with Yallourn having an average of 2 units and around 800MW of capacity missing throughout August. Loy Yang B had one unit (550MW) out for the first two days of the month and again for another two days at the end of the month. NSW also has significant outages during August with 2,300MW out for the last 11 days of the month. Liddell had around 1000MW of capacity out throughout August, Vales Point B had 662MW out for more than half the month and Bayswater had 673MW out for 11 days. Generation Mix 19 Jul Jul Utility Solar 2.4% Aug Utility Solar 2.8%
  20. 20. Aug 2020 20 Generation Strategies VICSA NSW During August the spot price softened in all regions except NSW. In SA there was less capacity offered overall, led by AGL who with less capacity offered in the below $300/MWh price band. In Victoria there was also less capacity offered overall. Participants who offered less capacity during August were EnergyAustralia and Snowy Hydro with less capacity offered in the price bands between $50/MWh and $500/MWh. Less capacity was also offered in NSW led by significant outages from AGL’s Liddell Power Station and Delta’s Vale Point B Power Station during August. In Tasmania, less capacity was offered overall, particularly in the lower price bands in the lower price bands QLD (not shown) saw little change in the capacity offered during August with another month of high levels of outages. TAS
  21. 21. Aug 2020Interconnector Flows 21 Exports across the QNI interconnector from QLD to NSW were at the highest level since September last year, with a net flow of 564GWh during August. The QNI interconnector was more constrained during the month, more than 25% of the time. Energy transfer across the NSW-VIC link was relatively balanced during August with a net flow of just 25GWh towards VIC for the month. The NSW-VIC link was more constrained 20% of the time during August. Energy flow across the Heywood interconnector increased during August with more energy sent in both directions. Net flow for the month was 79GWh in the direction of VIC. The Heywood interconnector was more constrained during the month at 18.5% of the time. After four months of net flow towards VIC across the Basslink, August saw VIC becoming a net exporter of energy to Tasmania with a net flow of 115GWh for the month. Basslink was also more constrained during August at 9% of the time.
  22. 22. Aug 2020Water Storages 22 Snowy Hydro’s water storage levels remained at around 28% during August, as Snowy Hydro continued the high levels of generation seen in recent months. Snowy’s generation during August was 406GWh which was slightly less that the previous month’s total of 413GWh. Hydro Tasmania’s water storage levels dropped below 40% during August. Total generation for August was more about 25% lower than the previous four months at 705GWh. August’s storage level was considerably lower then the last couple of years.
  23. 23. Aug 2020Gas Spot Prices 23 The average daily wholesale gas prices increased in QLD and NSW during August compared to the previous month, whereas VIC and SA saw average prices for the month decrease. The average gas price in QLD was just over $4/GJ for August, while in NSW it increased to $4.54/GJ. In VIC the average price softened to $4.42/GJ and SA recorded the highest average gas price for August at $5.36/GJ.
  24. 24. Aug 2020Summary LNG Exports 24 From the most recent information available from the Gladstone Port Authority, LNG Exports were at the lowest level in over two years with just 1.67m tonnes shipped during August, with shipments heading to just 4 destinations during the month. Exports to China were 1.23m tonnes during August. Exports to Malaysia were 188,200 tonnes while Japan received 134,200 tonnes. Lastly, Korea which received 115,640 tonnes during August. Total exports to China for 2020 to date is 66.7% of all exports, with the next largest export destination was Korea at 14.4%. Malaysia has a 10% share of LNG exports, followed by Japan at 6.4% and Singapore with close to 1.9%. Chile with its first shipment now has 0.5% share of total Australian LNG exports for 2020. Exports Year To Date
  25. 25. Aug 2020Enviro Spot Certificate Prices 25 The LGC spot price started the month at $42/certificate but in the last week of August jumped to $47/certificate where it closed the month. The STC price which had been falling during June and July, maintained a price just above $38/certificate during August. 31-Jul-20 31-Jul-20 $41.00 $38.23
  26. 26. Aug 2020 26 ‘Old’ Hydro LGCs Windfall LGCs Assuming for the balance of year Hydro Tas generation is the same as last year, the number of additional LGC’s will now be an estimated 1.5m. Gordon Dam is now well past its LGC baseline and is predicted to create almost 600,000 LGCs by the end of the year. The total potential number of LGCs that could be created assuming 2019 dispatch is repeated for the balance of 2020, is about 1.5m. In the context of the LGC annual target of 38m, this represents about 4.1%. The potential value of the LGCs will depend when sold, but if sold at: • Cal-20 forward price implies potential value of almost $74m • Cal-21 forward price implies potential value of $52m State LGCs Cal-20 LGC Price Cal-21 LGC Price Market Value (Cal-20) Market Value (Cal-21) TAS 1,468,499 $47.25 $33.50 $69,387,000 $49,195,000 VIC 95,744 $47.25 $33.50 $4,524,000 $3,207,000 Total 1,564,243 $73,911,000 $52,402,000 Potential 1.5m additional LGCs Potential market value of … $52.4m to $73.9m TA S VIC
  27. 27. Aug 2020Enviro Spot Certificate Prices 27 In NSW, the ESC spot price increased during August go a close of $26/certificate. In Victoria, VEEC’s softened from by about $2/certificate to close around $33.50/certificate. $34.93$25.25 31-Jul-20 31-Jul-20
  28. 28. Aug 2020Enviro Forward Prices 28 In the LGC forward market, Cal-20 and Cal-22 prices rallied during August while later years remained flat. The Cal-20 LGC forward price rallied by more than $5/certificate late in the month to a close of $47.25/certificate. Cal-21 rose by just over $2/certificate to a close of $33.50/certificate and the Cal-22 price rose by $1/certificate. The Cal-23 LGC forward price remained flat during August closing just under $13/certificate, as did the Cal-24 price with a close at $7.35/certificate.
  29. 29. Aug 2020 The El Niño-Southern Oscillation (ENSO) outlook has been raised to La Niña Alert, which indicates that the chance of La Niña forming during the southern hemisphere spring has increased to 70% or three times the normal likelihood. La Niña is associated with increased rainfall. 29 The rainfall outlook for Australia is showing a very high chance of exceeding median rainfall levels for most of the eastern half of the country, while most of WA is showing a below average chance of exceeding median rainfall levels. Weather Report & Outlooks The BOM’s median maximum temperature outlook for the coming months is showing an above 80% chance of exceeding median maximum temperatures in the NT, northern WA and QLD, as well as western Victoria and Tasmania. The rest of the country has an average or above average chance of exceeding median maximum temperatures. Sep-Nov Sep-Nov ENSO OutlookTemperature Outlook Rainfall Outlook v v

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