Electricity is the one hot commodity this summer
Source: AFR, 11 Dec 2015
Amid the gloom in energy commodities globally, wholesale electricity on the east coast is one of the few bucking the trend, providing some comfort for baseload power producers that have struggled in recent times.
After years of depressed wholesale prices on the National Electricity Market, the last 12 to 18 months has seen what Credit Suisse is calling an "almost exponential" increase as the injection of demand from the new Queensland LNG export industry coincides with plant shutdowns and rising fuel costs.
And the gains are not expected to melt away, being underpinned by permanent shifts in both supply and demand.
New figure released on Thursday by the Australian Energy Market Operator pared back the forecast increase in electricity demand arising from the three Queensland LNG plants. But the latest estimates haven't altered the turnaround in demand for grid-based power, which is now clearly on the up after years of declines.
Under AEMO's latest forecast, electricity consumption in Queensland will jump a still-significant 12 per cent between 2014-15 and 2016-17. While that is a couple of percentage points lower growth than the estimate in June, it represents a clear lift to demand across the NEM, where consumption is now seen rising 5.4 per cent in the three years to 2017-18.
The stubborn downturn in residential and commercial demand has also halted, despite the impact of the continuing rise of rooftop solar and energy efficiency efforts.
Queensland power industry sources estimate the three LNG trains up and running so far have added 600 megawatts of load given the power needed to get gas out of the ground at the coal seam gas fields. Once all six trains are up and running at Curtis Island, the total extra load is put closer to 1000 MW, again from the upstream CSG production given the actual processing plants on the island are powered by gas on-site.
Read More HERE