The Australian Energy Market Operator’s (AEMO’s) recently released Quarterly Energy Dynamics (QED) report for Q1 2020 stated that average spot electricity prices in the National Electricity Market (NEM) fell to their lowest levels in 4 years ($66/MWh) last quarter. Victoria, in particular, witnessed a significant drop – 48% – from Q1 2019 average price despite the market’s concern around summer reserve levels and reliability of coal-fired power stations in the state. Is this a new normal, and what does this mean for investment opportunities going forward?
In this week’s Chart of the Week, we present insights into how the ongoing transition is impacting price trends, as well as the dependence of future commercial opportunities on an understanding of the drivers behind these trends.