February 2020 Energy Market Review

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February 2020 energy market: Extreme price volatility and more narrowly avoided blackouts are seen as a nightmare summer draws to a close. But there are still rock-bottom prices to be found in the increasingly jittery futures markets.

New South Wales

NSW Futures Prices February 2020
  • Extreme volatility in 2020, 2021 and 2023 prices.
  • 2020 prices spiked 5%  to 7.6c/kWh in one day following transmission damage on Jan 31 before falling back to 7.1c/kWh.
  • 2021 and 2022 still at rock bottom prices of 6.3 and 6.2c/kWh respectively.

How did supply and demand affect the price?

  • NSW spot prices went through the roof on January 31 as the severed SA-VIC interconnection sent shockwaves through the grid. Prices in NSW surged above $12000MWh as generators scrambled to compensate for the loss of SA imports into Victoria.
  • Blackouts were narrowly avoided through the enactment of AEMO’s RERT agreements and the powering down of the Tomago smelter.
  • On February 1 temperatures in the 40s saw demand soar above 13000MW causing a price spike to $2500MWh at 5 pm.

Baseload Futures Price 25 February 2020

2020: 7.1c per kWh
2021:6.3c per kWh 
2022:6.2c per kWh
2023:6.8c per kWh

Indicative retail prices*

Off-peak Peak
5.9c per kWh7.9c per kWh 
*Based on offers we have seen in the last week.


Queensland Futures Prices February 2020
  • Queensland still continues to enjoy the lowest electricity prices in the NEM.
  • Prices for all years are below 5.5c/kWh having fallen steeply since late October.
  • Prices have not been this low since mid 2018.

How did demand and supply affect prices

  • Plentiful supply continued to keep Queensland’s spot prices low.
  • Queensland was the most insulated state from the events of January 31 but still saw spot prices lurch between -$120 and $1609MWh as the crisis unfolded.
  • Generation kept up easily with demand rising to a maximum of 9800MW on Feb 3 and spot prices around $100MWh.

Baseload Futures Price 25 February 2020

2020:5.4c per kWh 
2021:5.3c per kWh
2022:5.2c per kWh
2023:5.2c per kWh

Indicative retail prices*

Off-peak Peak
4.9c per kWh6.4c per kWh 
*Based on offers we have seen in the last week.

South Australia

South Australia (SA) Futures Prices - February 2020
  • 2021 prices have dropped into uncharted territory currently trading at 6c/kWh
  • 2020 and 2022 prices are sitting between 6.1 and 6.3c/kWh 
  • 2023 prices dropped sharply 11% from 8.2 to 7.4c/kWh following the disconnection and subsequent oversupply event on Jan 31.

How did demand and supply affect the price?

  • The January 31 loss of connection between SA and Vic left SA with a sudden and severe oversupply issue. 
  • Frequency in the SA grid surged within seconds, threatening blackouts and equipment damage.
  • The ‘islanded’ SA grid responded with surprising agility to arrest the spiking frequency. ~770MW of production was dropped within seconds across diverse generator types.
  • The states three grid-scale batteries soaked up 75MW of the excess energy.
  • Nearly 20% of all pricing intervals during the disconnection were at or below $0 falling as low as -$919MWh on the 4th of Feb amid low operational demand.
  • Ausnet reestablished a partial SA-VIC connection via a temporary line on February 18.

Baseload Futures Price 25 February 2020

2020:6.1c per kWh
2021:6.0c per kWh
2022:6.3c per kW
2023:7.4c per kW

Indicative retail prices*

Off-peak Peak
5.8c per kWh8.5c per kWh 
*Based on offers we have seen in the last week.


Victoria Futures Prices - February 2020
  • 2020 futures spiked 8% to 8c/kWh in one day following the loss of connection with SA before settling back around 6.6c/kWh 3 weeks later.
  • 2021, 2022 also spiked in response to the event.
  • 2021, 2022 and 2023 prices are currently all at record lows ranging from 5.5-5.9ckWh.

How did supply and demand affect price?

  • Spot prices hit the ceiling of $14700MWh on Jan 31 following the transmission outage.
  • Prices were above $7000MWh from 3pm to 7pm while grid operators struggled to boost the plummeting frequency and avoid blackouts.
  • Demand in February has remained below 8000MW while on Jan 31 demand soared to 9500MW prompting AEMO to urge Victorians to curb power use amid the lack of reserve event.

Baseload Futures Price 25 February 2020

2020:6.6c per kWh
2021:5.9c per kWh
2022:5.6c per kWh
2023:5.5c per kWh

Indicative retail prices*

Off-peak Peak
5.2c per kWh8c per kWh 
*Based on offers we have seen in the last week

As it stands, circumstances like the February 2020 heatwave, downed transmission lines, and the like have a significant impact on the energy market, increasing energy price volatility. But with the help of energy brokers like Leading Edge Energy, you can still take advantage of the very low retail offers that can still be found.

Act now to lock in low energy prices – contact one of our Energy Experts today!

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