Although electricity consumption and pool prices fell sharply this week due to more moderate weather, 2018 base load futures rose another 5%.
That’s three weeks in a row prices have risen 5% and FY18 futures prices have now cracked the $100 MWh mark in all States ($99 MWh in Victoria). Prices in the out years are not so high but there is much less trading in the out years (2019 and 2020).
More renewable energy will be available in FY19 from the current buildout of easy to build, fast to construct wind and PV farms. The Federal Govt must be very grateful for that, because without it there chances of a crisis are quite high.
It should be blindingly obvious to even the most rabid supporter of coal that no new coal power stations could ever be operating within the next six years, and frankly the same goes for a gas cogen plant. Renewables, lithium storage and maintaining the old coal and gas generators are the best bets for the next two years.
What I want to hear is what the Govt plans to do about energy security over the next 18-24 months. As Portland works up from 25% to 100% of capacity and Hazelwood closes, the prospects of drama have increased. On top of that significant institutional reform and a decent “integration” study are needed.
We regard the ALPs 50% renewable as the minimum target that should be aimed for but if the ALP doesn’t back the plan up with a study showing how it will be achieved and what the costs are, it leaves itself open to the current attacks. A decent integration study shouldn’t be that hard.
Share Prices
Figure 3 Selected utility share pricesVolumes
Figure 4: Weekly and monthly share price performanceVolumes
Figure 5: electricity volumesBase Load Futures
Figure 10: Baseload futures financial year time weighted averageGas Prices
Figure 11: STTM gas pricesDavid Leitch is principal of ITK. He was formerly a Utility Analyst for leading investment banks over the past 30 years. The views expressed are his own. Please note our new section, Energy Markets, which will include analysis from Leitch on the energy markets and broader energy issues. And also note our live generation widget, and the APVI solar contribution.
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