Annual electricity supply and demand in the NEM for the year ending April 2014 showed a continuation of trends seen in the year ending March 2014 and described in the last CEDEX® report. Demand and total generation fell slightly (Figure 1), as did supply from both black and brown coal fuelled generators. Hydro generation continued to fall, while wind generation increased slightly and gas generation increased more significantly (Figure 2). The overall outcome was further small falls in both generation and emissions. Compared with the year ending April 2013, the fall in generation was 4.4 TWh, equivalent to 2.4%, and the fall in emissions was 5.8 Mt CO2‐e, equivalent to 3.5%.
Factors contributing to these changes in annualised output from the various generation sources are as follows:
- Compared with April 2013, Snowy output in April 2014 was dramatically lower ― 49 compared with 218 GWh ― a continuation of the pattern seen in the two previous months.
- By contrast, output from Swanbank E combined cycle gas generator, owned by Stanwell Corporation, a Queensland government owned generator, and scheduled to be mothballed at the end of September next, as its contracted gas supply has been on‐sold, was much higher in April 2014 than in April 2013 ― 227 compared with 73 GWh.
- Wind generation was higher in April 2014 than in 2013 because five new wind‐farms have come into production over the intervening period: Snowtown 2 and Snowtown South in SA, Musselroe in Tasmania, Mt. Mercer in Victoria and Gullen Range in NSW. The balance of these increases and decreases in demand and supply saw a small reduction in the requirement for coal fired generation, bringing its annual market share to 73.8%, its equal lowest ever value. Wind achieved its equal highest ever share, of 4.6%.
Figure 3 shows the relative trends in total demand for electrical energy in each state in the NEM and also in WA. In April, annualised demand fell in every state in the NEM. By contrast, demand rose quite strongly in WA (strictly, the South West Interconnected System, or SWIS). Analysis of seasonal energy consumption (the four winter months, May to August, and the four summer months, December to March), some results of which were reported in last month’s CEDEX®, shows that the steady reduction in demand has been experienced in both winter and summer. Shifting winter heating loads to gas is therefore not an important contributor to falling demand for electricity.
Finally, in a first for CEDEX®, Figure 4 wholesale prices, specifically monthly median NEM regional spot prices (termed pool prices) in each NEM region (state) since the introduction of a price on greenhouse gas emissions in July 2012. The median price is a better measure of the general level of prices than the mean, because it minimises the effect of short term very high price spikes. These sometimes reach to over $10,000 per MWh, or 200 times the values shown in Figure 4, and so, even if short‐lived, can disproportionately affect means. These price spikes are also the occasions when most wholesale trades occur at spot prices, rather than at hedged contract prices, which are used for the majority of trades between generators and retailers. The median is generally a fairly good approximation to hedge contract prices. The key feature of this Figure is the steady fall in prices in all mainland NEM states since the middle of 2013. Note that the short periods of very high prices in January had no impact on median prices. In April, median prices net of the carbon price were about $28 per MWh for coal fired generators in NSW and Queensland, and below $20 per MWh for Victorian brown coal generators. It goes without saying that such prices are way below what would be required to build a new coal or gas fired power station.