Market Update | 9 August

• Wholesale electricity prices skyrocketed in southern states when wind and solar generation plummeted to zero in South Australia
• Improving Energy Efficiency Standards for Appliances

Wholesale electricity prices skyrocketed when wind and solar generation plummeted to zero on Monday 5 August.

Wholesale electricity prices skyrocketed in southern states when wind and solar generation plummeted to zero in South Australia, mirroring a similar event in June of the previous year. Fossil fuel generators seized this opportunity to push prices to the newly implemented market cap of $17,500 per megawatt-hour, capitalising on the absence of renewable competition. This pattern was replicated across states, with Victoria and New South Wales experiencing price surges despite significantly lower demand compared to previous peak periods. Conversely, Queensland maintained relatively stable prices below $300 per megawatt-hour due to a combination of sufficient wind generation and potential government intervention.

The absence of competition, particularly in South Australia with its limited generation sources and concentrated battery ownership, allowed fossil fuel generators to manipulate the market and drive prices to exorbitant levels. This incident underscores the urgent need for market reforms to prevent such exploitation and ensure fair pricing for consumers.

Improving Energy Efficiency Standards for Appliances.

Energy and climate change ministers had agreed to update the minimum energy performance standards on consumer appliances with the recommendations from Department of Climate Change, Energy and the Environment and Water (DCCEEW). The Energy and Climate Change Ministerial Council (ECMC) have agreed to further develop and expand the Equipment Energy Efficiency (E3 Program) strategy.

The strategy involves enhancing the Greenhouse and Energy Minimum Standards (GEMS) scheme to improve the energy efficiency of household appliances and equipment in Australia. Minimum energy performance standards for the following appliances will be updated:

• Televisions
• Dishwashers
• Washing machines
• Rotary clothes dryers.

Whilst standards of new energy efficiency requirements for digital signage displays will be introduced, inefficient halogen lamps will also be phased out where an LED equivalent is available.

The GEMS scheme has demonstrated significant benefits in reducing energy consumption and emissions. During the 2022-23 financial year, the scheme contributed to a reduction of between 5.5 and 8.5 gigawatt hours of electricity consumption, translating to savings of $1.3 to $2.1 billion for Australian households and businesses. Additionally, emissions were lowered by an estimated 4.2 to 6.5 megatonnes of carbon dioxide equivalent.

At Ecovantage, we consistently analyse market activity, policy changes, consultation releases, and creation rates in conjunction with wider landscape activity. This allows us to keep our clients at the forefront of all relevant changes, and to leverage the advantage that this presents. Thank you for your continued support, and please reach out if you have any general or project-specific questions.

Nancy Sanjoto | Account Manager, Energy & Carbon Services
Nancy specialises in HEER & IHEAB activities under the NSW ESS program, as well as LGCs under the federal Renewable Energy Target.