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Energy Market News

Monthly Edition: March 2024

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Loy Yang A trips all 4 units - 13th February causing a significant market price event

ASX Baseload Futures Prices March 2024

Energy Market News​

Ripples in the Aussie Power market after major price event in early February and warmer weather patterns emerging


Published:15 March 2024

Our Key Message

The Australian power market experienced ripples following a major price event in early February, hot weather and a major storm caused Loy Yang A Power Station to trip, causing chaos in the market on that day. Increasing consistency of hotter weather patterns during this period has also placed additional strain on the grid. 

While current local conditions are largely being driven by domestic policy announcements, international events continue to have a big impact on gas markets resulting in challenging contracting conditions.

As we move away from the summer volatility risk, we are moving towards the winter risk period which tends to put more pressure on gas pricing. 

key message

Market Summary

Price event and some late heat causing a stir in energy prices:

While a significant price in event in Victoria on the 13th of February caused some price volatility in the spot market, Loy Yang A Power Station tripped due to hot weather and a severe storm passing through the area, this had an immediate effect on spot prices but also a significant effect on future contract pricing across the market. This trip was a reminder to the market that there is still a strong reliance on grid stability and issues like Loy Yang A tripping will impact price.

The return to normal pricing in VIC quickly and a lack of volatility in VIC on some proceeding hot days gave the market some renewed confidence and the forward market did settle.

Other states did rally with the VIC curve and so far, all have started to settle if not retrace towards the pre-event levels.

Gas markets have remained indifferent to the electricity market volatility and are more impacted by policy driven issues and the international markets.

Contract price index

Source: Utilibox Energy Contract Price Index, using contract prices from Energy Action’s Reverse Auction platform. The index averages these contract prices - providing insight to pricing trends rather than specific contract price levels.

Electricity Contract Market 

It appears that Cal 25 contracts have encountered a soft resistance point, maintaining their levels for the past week. However, there was some movement this morning, with trades in the front half of Cal 25 contracts taking approximately $0.50 out of the curve. This decrease could mark the beginning of a retracement, potentially falling back in line with Cal 26 contracts.

The market responded positively to the soft update on Eraring Power Station. While no definitive response has been provided by either Origin Energy or the NSW State Government, the announcement that negotiations are ongoing has been viewed favorably. 

Although Cal 26 and Cal 27 contracts continue to hold a significant premium over Cal 24 and Cal 25 contracts, there was a shrinkage in the premium between Cal 26 and Cal 25 contracts last week.

Given last week's update on Eraring, it's advisable to keep a close watch on Cal 25 contracts as there is a strong possibility of further softening. Cal 26 contracts are closing in on similar levels to Cal 25 and are becoming more attractive, suggesting potential opportunities in this segment of the market.


Cal 25 contracts softened in the front half this morning, following some potential upward pressure observed last week. While last week's movement was relatively minor, there was a sense of buying requirements on the contract.

Meanwhile, Cal 26 contracts have continued to drift lower and remain well below the Cal 25 contract, indicating a persistent backwardation in the QLD forward contracts.

Recommendation: We recommend closely monitoring Cal 25 contracts as they appear to have encountered a resistance point last week, but today's downward trades warrant continued observation. Additionally, consider a soft-buy stance for Cal 26 contracts, as they are currently at low levels and experienced downward movement in one of the quarters this morning.


Cal 25 contracts experienced a short rally last week before stabilizing and maintaining firm levels. With warmer weather on the horizon and approaching the next price risk period of winter, there's a strong possibility that Cal 25 contracts won't retrace back to the lows observed prior to the Loy Yang A trip in early February.

On the other hand, Cal 26 and Cal 27 contracts, although backwardated (trading lower than Cal 24 and Cal 25 contracts), still have time to potentially fall to similar levels as Cal 24 and Cal 25.

Recommendation: Considering the current market conditions, Cal 25 contracts are now seen as a soft buy opportunity prior to winter. Buying now presents a potential missed opportunity if winter isn't as volatile as expected; however, it also avoids any potential price rises if volatility ensues during winter. Clients should consider looking into VIC Cal 25 contracts at this time. Cal 26 and Cal 27 contracts remain on watch as there is still time for those contracts to potentially reach similar levels as Cal 24 and Cal 25


Cal 25 contracts are now showing signs of trading back up, with a gentle increase in price. Interestingly, the contract is now trading above Cal 24, 26, and 27 contracts.Cal 26 and Cal 27 contracts have stabilized and are holding at their current levels. Cal 26 is now trading at a reasonable discount compared to Cal 25, indicating potential value in this contract. 

However, Cal 27 contracts still remain a bit distant and lack liquidity, making them challenging to assess.

Recommendation: We recommend a soft-buy on Cal 25 contracts, as it appears to have potentially bottomed out and is now trading higher than other contracts. Additionally, Cal 26 contracts seem like good value now, considering their reasonable discount to Cal 25. As for Cal 27 contracts, it's prudent to continue watching them for now due to their lack of liquidity and distant position.


ASX Baseload Futures Prices

NSW - ASX Future PricesQLD - ASX Future PricesVIC ASX Future prices

Latest data available from Utilibox

SA - ASX Future Prices

Electricity Spot Prices.

Market Events and some hot weather impacts current quarter pricing

In February 2024, Australian electricity prices witnessed significant levels of volatility, especially when compared to recent months. One notable event occurred in Victoria when the Loy Yang A Power Station tripped in mid-February. This event led to a short-lived price spike across Victoria and Tasmania before returning to normal levels. Although this event added some additional costs to the monthly average, the presence of ample generation capacity and low to negative daytime prices helped keep the averages lower than expected, based on historical precedents for such events.

While other states experienced lower levels of volatility compared to Victoria and Tasmania, they still observed more frequent fluctuations, which contributed to higher average daily prices across February. Additionally, ongoing hot weather in Western Australia contributed to strong prices in the balancing market.

Overall, the electricity market in February 2024 was in limbo. While we saw a major price event in Victoria in early February warmer weather had more of an impact on NSW & QLD compared to the other states. The renewed heat in the National Electricity market (NEM) pulled up pricing in NSW, VIC & SA whereas the leveling out of humidity in QLD helped to drop average prices.

Ongoing hot weather, and extended periods of it kept the average balancing prices in WA strong.

Monthly Average Spot Price

Monthly Avg Spot PriceMonthly Avg Spot Price past 12 months

All figures in $/MWh as of  14th march. Latest data available from Utilibox

Gas Markets

Average Spot PricesACC Netback Pricing

ACCC Netback Pricing: ACCC netback pricing expectations for February 2024 are lower than January 2024 and significantly lower than February 2023. This quasi-rate serves as an estimate of the underlying wholesale gas price for retail gas contracts.

Here's a breakdown of the key points:

  • Spot Gas Prices: Spot gas prices have been holding relatively flat across the week. February averages are higher compared to December and January due to growing demand. The demand increase is primarily driven by manufacturing facilities coming back online after the Christmas break and gas power generation (GPG) to manage electricity demand.
  • Trading Activity and Futures Prices: There was limited trading activity in Victorian gas (DWGM) on the ASX, with prices fluctuating slightly. Cal 24 gas futures prices are now trading only slightly above the spot price, indicating a significant softening compared to retail contracts. This softening in futures prices may exert downward pressure on retail contracts.
  • Global Gas Demand: The International Energy Agency (IEA) has predicted a rebound in global gas demand in 2024. Limited new LNG production combined with increased demand may impact global prices, potentially affecting domestic pricing as well.
  • Domestic Gas Demand: Domestic gas demand has been slow at the start of 2024, down 31% compared to January 2023. However, strong demand for gas power generation in Queensland has offset some of this decrease. Output in southern fields has been low, but storage levels in Victoria are higher than in previous years.
  • US Gas Market: US investors are bearish regarding US gas prices due to a glut of volume hitting the market.
  • Recent Trends in Spot Gas Prices: Spot gas prices rallied late over the weekend in South Australia and Victoria due to increased demand for gas power generation driven by hot weather. Queensland and New South Wales saw a slight upward trend in gas prices but remained reasonably stable overall.
  • Retail Contracts: Retail contracts are still not aligning with spot market prices, with the premium for firm pricing remaining above 20%.

Overall, it seems that various factors such as demand dynamics, global market trends, and regulatory influences are shaping the gas market, leading to fluctuations in prices and trading activity.

Environmental Certificate Markets.
Trends, Pressures, and Regulatory Shifts

Small Scale Technology Certificates (STCs)

The rally in Small Scale Technology Certificates (STCs) during late February, with prices closing back towards $40.00, is noteworthy. This rally is particularly interesting considering that the clearing house is still in surplus, unlike the situation in 2023 when it faced a significant deficit, leading to certificates trading at a penalty.

The fact that prices are rising despite the surplus in the clearing house suggests that the market dynamics driving the price increase are more controlled. It appears that sellers are holding up prices rather than an actual shortage of available certificates.

This controlled price increase could be attributed to various factors, such as increased demand for STCs or changes in government policies and incentives that affect the market dynamics.

Overall, the rally in STC prices indicates a resilient market where sellers are able to maintain prices despite the surplus in the clearing house, suggesting underlying strength or stability in the demand for STCs.

Latest Spot Trade

Latest Spot Trade

Latest data available from Utilibox

Large Generation Certificates (LGCs) forward markets 

Large Generation Certificates (LGCs) maintained solid trading volumes across both spot and forward-dated contracts. However, the spot price experienced a decline throughout February. This decrease in spot prices can be attributed to the market moving on from the mid-February compliance requirement. As certificates were no longer urgently required following this deadline, the demand for LGCs in the spot market decreased, leading to a softening of prices.

This pattern is common in markets with compliance deadlines, where prices often soften after the deadline has passed as the urgency for acquisition diminishes. Despite this softening in spot prices, it's notable that trading volumes remained solid across both spot and forward contracts, indicating continued activity and interest in LGCs beyond immediate compliance deadlines.

Overall, while spot prices may have softened, the solid trading volumes suggest ongoing market participation and confidence in the future value of LGCs.

Large Generation Certificates (LGCs) forward markets 

Victorian Energy Efficiency Certificates (VEECs) 

Victorian Energy Efficiency Certificates (VEECs) have experienced a softening in their value after reaching highs in December and January. The increase in available supply, particularly due to significant weekly creation volumes in February, has led to downward pressure on the short-dated certificates. As a result, the certificate value fell to below $94.00.

There seems to be a persistent issue regarding the availability of longer-dated certificate volumes. While some trades have occurred in small volumes, the majority of trades are either spot or very short-dated. This lack of activity in longer-dated trades complicates price discovery in the back end of the market.

Despite this challenge, there should be improved liquidity in the short-dated certificates due to the rising creation volumes. This suggests that short-term dynamics, such as weekly creation volumes, are driving market activity and influencing pricing for VEECs.

Overall, the VEEC market appears to be experiencing fluctuations in response to changes in supply dynamics, particularly in the short-term segment, while facing challenges in trading longer-dated certificates.


Energy Saving Certificates (ESCs) 

It appears that Energy Saving Certificates (ESCs) are facing similar dynamics to VEECs, short-term certificate trades having a significant impact on their market.

Short-term pricing for ESCs seems to be influenced by weekly creation numbers, and as these values have increased, prices have fallen accordingly. Currently, ESCs are trading below $22.00 per certificate.

This suggests a certain level of volatility in the ESC market, with short-term factors such as weekly creation numbers playing a crucial role in determining pricing. The lack of reported trades for longer-dated periods indicate uncertainty by market participants.

Overall, it seems that ESCs are experiencing some challenges in maintaining stable pricing, with short-term dynamics having a notable impact on their value.


Australian Carbon Credit Units (ACCUs) 

There has been a significant increase in the trading volume and value of Australian Carbon Credit Units (ACCUs), specifically the generic ones, in the past month. These generic ACCUs have experienced a notable uptrend, with their value rising by more than 20% since November 2023. Initially priced below $30.00 per certificate, they peaked above $36.00 before settling slightly.

Despite some recent softening in their value, the overall trend still appears to be upward. This upward trend is primarily attributed to ongoing demand, which continues to drive the market for ACCUs.

It's worth noting that Method Specific and Human Induced Reduction (HIR) volumes have been minimal during this period, suggesting that the trading activity has centered around generic ACCUs.

Overall, the ACCU market seems to be buoyant, with demand remaining strong and driving the increase in value for generic ACCUs


Appendix – New South Wales Baseload ASX Futures

NSW Baseload ASX Futures

Latest data available from Utilibox

Appendix – Victoria Baseload ASX Futures

VIC Baseload ASX Futures

Latest data available from Utilibox

Appendix – Queensland Baseload ASX Futures

QLD Baseload ASX Futures

Latest data available from Utilibox

Appendix – South Australia Baseload ASX Futures

South Australia Baseload ASX Futures​

Latest data available from Utilibox

Appendix – Baseload ASX Futures

Calendar Year 2024

calendar year 2024

Latest data available from Utilibox

Appendix – Baseload ASX Futures

Calendar Year 2025

calendar year 2025

Latest data available from Utilibox

Appendix – Baseload ASX Futures

Calendar Year 2026

calendar year 2026

Latest data available from Utilibox

Appendix – Baseload ASX Futures

Calendar Year 2027

Calendar Year 2027

Latest data available from Utilibox

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