My second short article today just contains this snapshot extracted from NEMreview v6 (the older installed software, which went through its own upgrades during 2020 as part of the larger development project) that highlights how average spot prices were much lower in all regions than they had been for a number of years beforehand:
I’d been involved in several conversations with different Retail Brokers during the week (one type of client that gains value from the NEMreview software) about the clear change to pricing patterns as a result of a number of factors as well:
Factor #1) Whilst COVID-19 did not have a huge effect on electricity consumption in the NEM (thankfully – because of what that would have represented of the broader economy), it did contribute to lower oil and gas prices globally – which flowed through to lower gas prices for gas-fired generation (coincidentally, see Allan’s article about this on Monday next week) and hence electricity prices in the NEM;
Factor #3) We’ve seen the ongoing rise of Wind and Solar generation swamp the market at an increasing number of dispatch intervals … even in December 2020 … and drive prices down below $0/MWh. Clearly something’s got to give, there – but, before it does, average prices are lower as a result.
Coincidental, also, that the AEMO released its Quarterly Energy Dynamics for Q4 2020 that discusses some of these factors as well.