July Energy Market Update
Over the past four months, we’ve been sharing regular updates about what’s been happening in the energy market. Back in early April we were highlighting that international factors were likely to drive increased prices and volatility. In May we saw these factors accelerating, and by early June we shared that the forecast volatility was fully arriving as the energy crisis suddenly burst into the mainstream press.
Well, the six weeks since that last update have probably been the most intense in the history of the Australian Energy Market so we thought we’re definitely overdue for another update!
Here’s the latest on what’s happened, what we see going forward, and how we’ve been working to help.
A recap of what’s been happening
The factors that have driven wholesale prices over the last several months appeared to reach their peak in late June and early July:
- International sanctions against Russia, a major exporter of coal, gas and oil, have driven up international coal and gas prices. This has been further heightened by Russia itself attempting to weaponise its control of European gas supplies.
- More flooding of coal mines, and continued outages at large coal generators has led to significant reductions in energy supply
- Cold weather has driven record-breaking winter electricity demand in QLD and very high demand in NSW.
All of this has resulted in very high wholesale prices, rapidly increasing fixed retail prices, ultimately causing many energy retailers to shut down.
Finally, we saw the most dramatic moment in late June when tight conditions, high prices, and some dubious actions from large energy generators resulted in a complete energy market meltdown that required the market operator to step in for two weeks to suspend the market and give it a reset.
(Phew - what a list! 😬)
Going forward
This has been an incredibly unstable time in the market, so we’re hesitant to forecast too much. However, the last couple of weeks seem to have shown the energy market stepping back from the intense volatility of late June and early July. We’ve seen more generators come back online in the last week, and increased solar generation as the days start to get longer, putting more cheap green energy into the grid.
Forward markets suggest that prices should start to stabilise in the next few months, but with the international situation likely to remain volatile we don’t expect prices to fall back to where they were in 2021 for some time.
How we’ve been working to help
We’ve been hard at work trying to have our customers’ backs. Many customers have received credits as a result of our price protection guarantee, including via early payments designed to help manage cash flow and prevent bill-shocks during this time. We’ll continue to do this as we see sustained prices above our guarantees.
These sustained high wholesale prices continue to show the need for more cheap renewable energy to be integrated into the grid across all states as a way to reduce reliance on fossil fuels.
To help all of our customers use more green energy and further accelerate the transition to a cheaper, greener future, we also introduced some changes to the Amber app. With our “Greenest Grid” notifications, customers can now get reminders to ramp up their energy-use during these green windows, knowing the price of energy is at its lowest and any energy used at this time will build more support for renewables.
Secondly, we launched our #GridSeekingBatteries campaign to put more cheap renewable power into the grid, starting now.
Our customers with solar and batteries have been able to take advantage of high prices during this volatile time while supporting the grid, with some of our SmartShift customers earning $40-$100 a day during price spikes. Our campaign was about encouraging more current and would-be battery owners to play their part in reducing Australia’s reliance on expensive and dirty fossil fuel power.
If you are interested in getting a solar and battery system installed or finding out more about our SmartShift program, which automates batteries to minimise bills and put more green energy into the grid, you can email us at solarandbatteries@amber.com.au or book a call with one of our team members.
Further ahead
Amber customer are still well protected through our price guarantee and we’ll continue to work with our customers to help you reduce bills, maximise energy earnings, and accelerate the transition to 100 per cent renewables. You can find out more about our 2022-23 bill guarantee here.
Please reach out to us if there’s anything we can do to help in the meantime: info@amber.com.au.
