Cheap electricity is back in Australia

Source: RenewEconomy

8th May 2020

The futures market for wholesale electricity prices are dropping across the NEM. On a global level, electricity prices in Australia are once again towards the low end of the world scale. There are a few reasons contributing to wholesale electricity prices dropping in Australia.

Firstly, thermal fuel prices have collapsed, meaning both coal and gas prices have dropped. The drop in coal prices is likely due to the impact of Covid-19, while the drop in gas prices is a combination of an oversupply in the international maket that is flowing back into the domestic market, and also the impacts of Covid-19.

Supply is increasing with a number renewable projects connected over this past summer, and many more projects in the pipeline to be connected in coming years. These large-scale renewable projects are being factored into the future wholesale market.

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