Average spot prices dropped across mainland states from December into January, with New South Wales experiencing the sharpest decline at almost 40%. Meanwhile, Tasmanian saw a significant 50% price increase driven by ongoing dry conditions that continue to put pressure on hydro generation volumes. January rainfall was under half of the average, leading to a 35% reduction in Hydro Tasmania’s generation from December, and a 26% decrease from January 2024. With little relief expected from these dry conditions, it is likely Tasmania will face continued pressure on prices in the near term.
The highest monthly price was recorded in Queensland at $114.01 ($0.38 higher than Tasmania). A new all-time maximum demand record for Queensland was set on 22nd of January, followed by a third-highest maximum demand record two days later the 24th of January. The peak demand on the 22nd of January was ~500MW higher than forecast, which took both AEMO and the market by surprise. This triggered a surge in spot prices above $10,000, lasting almost two hours and underscoring the unpredictability of demand during extreme conditions.
Interestingly, despite not being the hottest day of the month, the 22nd of January saw demand more than 10% higher than on the hottest day a week earlier in Brisbane. This highlights the challenges of accurately predicting demand in the face of fluctuating weather patterns and unexpected spikes.
Electricity price insights
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