Increased demand due to cool weather, higher fuel costs, and low renewable generation led to high average spot prices in June. While there were a few days where the spot price of energy exceeded $1000/MWh, these events were few and far between (unlike May, where we saw prolonged volatility in New South Wales).
Electricity price insights
Cold weather in southern mainland NEM regions resulted in higher-than-typical cumulative heating degree days, bringing increased electricity demand in Victoria and South Australia.
Average demand curves for the two regions show higher morning and evening peak demands than in previous years which suggests the higher electricity demand was at least partially due to heating as households try to alleviate the cooler temperatures and keep warm.
Higher fuel costs also contributed to higher energy prices. In Victoria gas demand was high due to increased gas-fired electricity generation to compensate for lower renewable output, as well as for direct heating for households. Due to an already tight gas market, this increased demand pushed gas prices up through June. These increased gas costs made it more expensive to run gas-fired power stations to produce electricity.
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