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Energy Market News

Monthly Edition: May 2024

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

    Market Wrap May 2K24

    Australian Energy Market Trends 2024: A Comprehensive Overview

    Strong spot and Administered Pricing Period in NSW cause market pressure.


    Published: 15 May 2024

    Our Key Message

    Welcome to our comprehensive analysis of Australian Energy Market Trends for May 2024. This monthly wrap provides a detailed overview of key developments, pricing dynamics, and future projections that shape the energy landscape across Australia.

    Volatility returns to the market, the steady increase in wholesale prices across April saw a short-term reverse when a key announcement was leaked to the media about Eraring Power Station. This was short-lived as NSW entered an Administered Pricing Period in early May as generation shortages and network constraints wreaked havoc.

    The ACCC Netback series forecasts a decline in whole gas prices by mid 2026, this is out of alignment with AEMO forecasting an increased shortfall for the same time.

    Market Wrap May 2K24


    At 1945 hours 8th May, NSW went into an Administered Price Period. This means that AEMO has determined that the rolling sum of the uncapped spot prices for NSW over the previous 2016 trading intervals (7 days) has exceeded the Cumulative Price Threshold (CPT) of $1,490,200.00. 

    An Administered Price Cap (APC) of $600.00/ MWh will apply to all trading intervals during this administered period price period. This APC will apply to spot prices and all market ancillary services in NSW. There is also an administered floor price (AFP) of -$600.00 which also applies to the spot price. 

    AEMO will continue to monitor the rolling sum of uncapped spot prices and issue further market notices. This is likely to remain in place for several days. 

    How does this affect our clients?

    • The spot price will remain between $600 and -$600 during the price period, regardless of the actual spot price. However, AEMO calculations use the actual spot price of pricing, for rolling price cap regulations.
    • Potential clawback by generators through retailers as generators can recover lost revenue through retail electricity contracts.
    • Clients may incur additional fees for their NSW sites once AEMO identifies the recoverable value.

    Market Summary

    The second only ever Administered Pricing Period in NSW has caused  a strong market

    The forward markets had started to settle in April and with the leaked announcement (yet to be made official) about Eraring Power Station and extension to it’s end date. There is likely to be a year extension with an option for an additional 2-year extension – bringing the potential end date out to 2029. The market pushed down the back end of 2025 and 2026, the Cal 27 contract did soften but to a lesser degree. In the other states the major impact was the 2026 contract.

    Early May the NSW market experienced a spot price event, this put the NSW region into an Administered Pricing Period capping prices at $600.00. It was driven by a combination of coal-fired power station outages, low roof-top solar output, issues around network constraints (the ability to move energy around the grid) and a higher reliance on gas and hydro generation to make up the shortfall which at the time was bid in at higher bands. This caused the market to move back up quickly and strongly, and we have seen the curve continue to trade up as we move into winter. While there is a chance that prices will soften post winter, the short-term sentiment is coming from the buy side.

    Wind generation in Victoria was lower at the start of May compared to April which is also adding pressure to the market dynamic.

    ACCC LNG (Liquefied natural gas) Netback Gas Pricing was released via the ACCC website in early May. The update is now indicating a strong price drop in Winter 2026 (northern hemisphere summer). While the ACCC LNG netback model is showing a potential price drop, the AEMO GSOO announcement last month was indicating a very tight supply for the same period. These two pieces of information are at odds with each-other and there needs to be some more information made available to allow for a clearer picture of that potential impact.

    Market Summary

    Source as of 9th May: 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.

    Market Summary

    Western Australian Market Update

    1. Liquidity and market activity: The Western Australian market operates differently to the NEM and does have fewer active participants which has been causing issues in levels of liquidity and competition. In recent months, not all retailers participate in all markets and periods, which reduces competition in the market. This could be based on some retailers having the lack of capacity to participate in specific market segments due to licensing issues, while others have less incentive or ability (including trading limits), to offer pricing in longer-dated contracts. The impact of this, is now more important to understand the market dynamics around timing to market both from a price perspective but also maximizing the number of participants actively participating in pricing events.
    2. Gas Prices: Wholesale gas prices appear to be softening as we move deeper into 2024. While they are still well above historical pricing it does appear that they are coming off the most recent high in 2023. While the wholesale gas is a key indicator it is not the only driver for Retail contracts which are also dependent on other factors like pipeline capacity and cartage charges.
    Wholesale WA Gas Pricing

    Source: Gas Trading Forecast vs Actual for WA

    Electricity Contract Market 


    Contracts in April dropped significantly due to the soft announcement around the extension of Eraring Power Station. While the announcement is not official the level of detail announced in April pushed the forward curves down across Cal 25, 26 and 27. Most of the value came out of the Cal 26 and Cal 27 contracts as they are the most affected by this announcement. On May 8th, there was a massive spike back in NSW forward contracts, as well as in other states. This price event caused by generator outages, network constraints, and lower-than-anticipated levels renewable generation, triggered NSW to enter an Administered Price Period (APP). This results a downward momentum into a bull run across the rest of 2024 contracts as well as forward contracts of Cal 25 and 26. The APP is expected to finish on Tuesday the 14th of May unless some other issues occur. And this bull run is unlikely to soften till the post winter period.

    Cal 27 contract is now backwardated and presents value compared to the 2025 and 2026 contracts.


    • Cal 25 future contract is a now approaching similar levels to where it was trading prior to winter 2023. That contract did soften post winter, but current factors need to be considered. While it does feel over-valued and should soften post winter 2024, there is less time available for this drop to occur prior to the start of the Cal 25 contract and it has less opportunity to get back down to those lower levels.
    • Cal 26 contracts have followed the same trend as the Cal 25 contracts and do feel over valued. While the Cal 27 contracts do also feel over-valued, they are currently at a significant discount to the Cal 25 and Cal 26 and present some opportunity.



    The contracts in QLD were directly affected by the Eraring announcement and softened across the board. They were less affected by the price event on the 8th of May however, this event is putting buy pressure on the QLD contracts albeit to a lesser extent. Callide C at this stage, is still slated to resume operations by the end of Q2 or the beginning of Q3. As of now, there are no indictors that suggest otherwise.

    Cal 26 and 27 contracts are still strongly backwardated compared to the Cal 25 contract. They are both however showing signs of moving upwards as buying pressure increases across all the ASX contracts.


    • Cal 25 contracts are now trading at all time high levels and like NSW do feel over-valued. We are adjusting our recommendation to a strong watch/soft buy. If clients are able to withstand the winter period, the expectation is that prices will decrease post-winter. However, like other states, this window will be tighter due to limited lead time available.
    • Cal 26 and 27 contracts are still under watch, will create an opportunity to gather value from backwardation (longer-dated contracts priced lower than Cal 25 contract).



    The VIC contracts had started to soften across April, both the Cal 25 and Cal 26 contracts had dropped across the start of Q2 as plenty of generation and milder weather kept the market in check. Wild spot market showed stronger levels of volatility starting to subside than previous months.

    However, the price event in NSW on the 8th has put significant pressure on the Cal 25 and 26 contracts, causing them to both jump significantly. This jump has yet to settle and becomes a potential short-term risk as we move into winter.

    Cal 27 contracts are still backwardated but did tick up slightly last week. There is still some decent discount in the Cal 27 contract compared to the Cal 25 and 26.


    • Cal 25 contracts have continued their bull run and are approaching levels seen prior to winter in 2023 in the Cal 24 contract. While they have some more run left in them to hit the same levels as the Cal 24 contract prior to winter 2023, clients should consider where they need set budget levels and if they can hold off purchasing to post winter or need to close out short-term positions now. There is an expectation that we should see a softening in the curve post winter.
    • The Cal 26 and 27 contracts are still under watch, the Cal 26 contracts while still trading at a discount to the Cal 25 contract it has moved up. The Cal 27 contract is presenting a good discount and is soft-buy.



    The SA contracts remained largely unaffected over last few weeks and while they are slightly pushing up, they have not jumped unlike the other states did after the 8th of May.

    Longer-term contracts are still backwardated and do provide good value at the ASX levels. However, SA is late to react due to the challenging lack of liquidity in that market.

    Cal 26 and Cal 27 still have not moved on the ASX but the expectation is that those contracts are up in value along with the other states.


    • SA contracts are still a buy at these levels with current levels as they have not moved inline with the other states.
    • Recent spot pricing in SA has started to increase as we move into winter, price volatility is still an ongoing risk, but the expected mild weather should help minimise that risk.
    • Cal 26 and 27 contracts are soft buys at these backwardated levels and do present some good future value.

    ASX Baseload Futures Prices

    NSW Contract PricesQLD Market WrapVIC Contract PricesSA Contract Prices

    Electricity Spot Prices.

    Mild temperatures offset by capacity challenges, creating maintenance spot prices. Market event in early May highlights balance of supply and demand in the NEM.

    April average prices began to strengthen despite forecasts of wild weather and increased rainfall. Although the Bureau of Meteorology predicted mild conditions, this did not reflect in the average spot prices as evening peak prices remained strong. Furthermore, ongoing wet weather sustained high daytime levels and have not seen the Solar Sponge affect on daytime prices.

    Early May had another market event, with NSW entering an Administered Price Period (APP), capping prices at $600.00 from May 8th until likely May 14th. This period saw sustained volatility on the evening of the 8th, pushing the rolling price average the APP threshold.

    Several factors contributed to this price event:

    • 5 coal-fired power stations were offline.
    • Network constraints hindered additional generation imports to NSW
    • Reduced solar generation due to high levels of cloud cover
    • Gas and Hydro generation was bid in at high levels.

    In contrast, WA prices remained consistent throughout April to May. Some volatility persisted in the evening peak period of the balancing market, it was lower in intensity and duration.

    Monthly Average Spot Price

    Monthly spot price graphMonthly spot price table

    All figures in $/MWh as of 10th May. Latest data available from Utilibox

    Gas Markets Breakdown

    Gas Market Spot PriceACCC LNG Netback Gas Pricing

    Source: ACCC LNG Netback Gas Pricing - As of 1st May

    • Spot Gas Prices: Spot gas prices have been stronger as we move into winter. We have also seen some stronger spot over the last couple of days as some capacity issues across the market has led to a stronger reliance on gas and hydro generation. VIC pricing is sitting below the other states, but we are seeing it rise across all the states. While VIC is still trading below $12.00/GJ the other states are now well entrenched in the $12-13.00/GJ range.
    • Trading Activity and Futures Prices:  While the spreads on the ASX Gas screens are still quite wide, we are seeing far more markets being made in the VIC Gas market, with all quarters having markets from Q2 2024 through to the end of 2026. Traded volumes are still minimal and focused on the short-dated  periods, but we have seen some small trades in the Winter 2025 contracts.
    • ACCC LNG Netback Gas Pricing: The ACCC market report is still showing a potential price increase over the next summer 2025 (northern winter) but it is now showing a significant decrease in expected prices for winter 2026. We are considering this a low likelihood of resulting in significantly lower pricing in the 2026 at this stage. The GSOO (Gas Statement of Opportunities) has indicated a tightness in supply for 2026 southern winter and the ACCC is forecasting a big drop in pricing, our expectation is that price will remain tight.

    Environmental Certificate Markets.
    Trends, Pressures, and Regulatory Shifts

    Small Scale Technology Certificates (STCs)

    The STC market has continued to be flat and has been stuck at this level April. The market has not moved away from the $39.90 level at currently there is nothing that is likely to move this market. The Clearing house is still in surplus and is not a factor affecting underlying price. The compliance percentage moving up from 16.29% to 21.26% has continued to keep buying pressure on the market.

    Latest Spot Trade

    Small Scale Technology Certificates (STCs)

    Large Generation Certificates (LGCs) forward markets 

    Another month of active trading in the LGC markets. While there Active trading throughout the month putting upward pressure on the  spot price with some significant volumes going through, this was both in the spot contracts as well as the longer dated contracts. Spot traded up to close out the month back above $47.00. The contract is predicted to have a further upward trading left in it. Certificate requirements are being driven at this point by voluntary requirements as we have moved away from the compliance period.

    Large Generation Certificates (LGCs)

    Victorian Energy Efficiency Certificates (VEECs) 

    Certificate pricing in the VEEC market has hit new record highs with spot certificates trading above $100.00 for the first time. Last trade for a spot VEEC was $102.75, this is up approximately $8.00 on last month or about 9%. VEECs are still very spot focused with minimal longer-term certificate trades going through.

    Creation volumes have slowed down over the end of April into early May and we are seeing this tightening of supply being reflected in pricing.

    Energy Saving Certificates (ESCs) 

    We have seen some change in the ESC pricing over the past month or so, while the VEECs have been on a bull run (upward), the ESCs have been pushed down and are now trading below $20.00. ESCs are also typically only traded in the near-term and we don’t see too much interaction in the longer-dated periods, this makes ESC pricing strongly correlated to the weekly creation volumes.

    Creation volumes have started to slow over the back half of April into May and are sitting below the 2024 weekly average numbers but well above the average creation levels for 2022. Based on this decrease in creation volume, there is a good chance we might see the certificate price bounce back above $20.00 in the next week or so.

    Australian Carbon Credit Units (ACCUs) 

    ACCUs have continued to trade in some strong volumes across the last month. This has been a mix across both Generic and Human Induced Reduction (HIR) ACCUs with both certificates rallying strongly through April. While typically the trading has been in the short-term or spot markets, we have also seen some volumes trading in the form of options. These trades are longer-dated and tend to be in large volumes.

    Appendix – New South Wales Baseload ASX Futures

    New South Wales Baseload ASX Futures

    Latest data available from Utilibox as of 9th May

    Appendix – Victoria Baseload ASX Futures

    Victoria Baseload ASX Futures

    Latest data available from Utilibox as of 9th May

    Appendix – Queensland Baseload ASX Futures

    Queensland Baseload ASX Futures

    Latest data available from Utilibox as of 9th May

    Appendix – South Australia Baseload ASX Futures

    South Australia Baseload ASX Futures

    Latest data available from Utilibox as of 9th May

    Appendix – Baseload ASX Futures

    Calendar Year 2024

    Baseload ASX Futures  2k24

    Latest data available from Utilibox as of 9th May

    Appendix – Baseload ASX Futures

    Calendar Year 2025

    Baseload ASX Futures 2k25

    Latest data available from Utilibox as of 9th May

    Appendix – Baseload ASX Futures

    Calendar Year 2026

    Latest data available from Utilibox as of 9th May

    Appendix – Baseload ASX Futures

    Calendar Year 2027

    Baseload ASX Futures 2k27

    Latest data available from Utilibox as of 9th May

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