Know your NEM: volumes down, but futures prices at record highs

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An uneventful week, apart from the AGL results and the cancellation of the Portland energy supply contract.

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Figure 10: Baseload futures financial year time weighted average
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  • Volumes : Volumes in the week ended August 12 were soft and a touch below last year, despite the ongoing 4% growth in QLD. The bigger picture here is that in the calendar year to date, NEM-wide volumes are essentially little changed on last year.
  • Future prices: Futures prices increased to be at new highs in NSW and Vic for FY18. We were somewhat surprised to see so little reaction in the futures prices to the news that the owners of Portland Aluminium smelter are cancelling their contracts. This must increase the risk of the smelter closing over the next 1-3 years.
  • Spot electricity prices:. Spot electricity prices were much weaker this week and were  just 7% above last year’s level. Good levels of wind generation and lower demand helped.
  • REC. REC prices in FY17 and FY18 nudged up, but theoretical prices in FY19 and FY20 were a touch softer.
  • Gas prices : gas prices were lower, and although well up on last year are more in line with a steady rather than dramatic increase.
  • Utility share prices: Utility share prices were relative soft, with the exception of minnow electricity broker EWC. AGL on the back of soft results and relatively soft indications on FY17 guidance was down 8% in the week but is still well up on last year.
Figure 1: Summary
Figure 1: Summary

Share prices

Figure 2: Summary share price movements
Figure 2: Summary share price movements

 

Figure 4: Weekly and monthly share price performance
Figure 4: Weekly and monthly share price performance

Volumes

Figure 5: electricity volumes
Figure 5: electricity volumes

Base Load Futures

rsz_screen_shot_2016-08-15_at_20934_pm

 

Figure 10: Baseload futures financial year time weighted average
Figure 10: Baseload futures financial year time weighted average

Gas Prices

Figure 11: STTM gas prices
Figure 11: STTM gas prices

David 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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