As a brief PS to my earlier post, here’s a particularly striking image of prices dropping through the floor in Queensland today:
I can’t recall too many occasions when prices in Queensland were in the twenties, since carbon pricing was introduced.
I remarked about low prices and demand 2 weeks ago – well, this is even worse (and, yes, QLD did lose the State of Origin series for the first time in a gazillion years). Prices bumped around $30 and below until starting to ramp up in late afternoon, as demand began to recover for the evening peak.
A trader that I have just spoken with mentioned prices being “soft” in QLD today – I’m sure the generators here would be noting that they could not be much softer than this without being jelly!
(a) Perhaps the Queensland generators have adjusted their bids to take out the cost of carbon from their pricing (we won’t know until tomorrow, when we check ez2viewAustralia), but that would not seem to be a logical thing to do – as we’re not yet sure that the Carbon Tax repeal will pass the senate.
(b) If this is not the case, then it does reveal how solar is really starting to cause a whole world of pain to existing generators in Queensland, and promising more.
Have a look at this chart trending the 5-minute dispatch demand target over the past 24 hours across all regions (with NEM-wide being shaded at the back on the axis on the right), again taken from NEM-Watch:
As noted in the chart, there may be a number of factors contributing to the demand shape – which looks significantly different from that for Victoria today (but is similar to that for NSW, and is what would be expected as a “typical” winter peaking shape):
(a) It did warm up in QLD more than in VIC – so perhaps heating requirement was reduced here (though certainly not warm enough to require air-conditioning in Brisbane).
(b) On a sunny/cloudless day, the new distributed solar power station that is rooftop PV (particularly focused on the South-East corner) will have made a big dent.
As solar continues to eat the midday lunch of scheduled demand, dampening prices through the middle of the day, it seems likely that the generators (starved of volume) will use whatever advantage they have to make back some of the losses in the mornings and the evenings – as they are trying to do as I type…
It promises to be an interesting next few weeks when (if?) the carbon pricing winds off …