The local gas spot price has roared back to life:
This follows similar moves in Asain gas markets as they chase oil higher:
Amusingly, AEMO was celebrating yesterday:
Electricity demand fell to a record low during the three months to September 30, as benign weather and an uptick in rooftop solar cooled usage, which is expected to temper household and business bills.
The Australian Energy Regulator said as a result of the mild weather and increased renewable penetration, wholesale electricity prices in the National Electricity Market were less than half that seen at the same time last year, and in all regions except South Australia prices are similar to prices seen in the third quarter of 2021.
Households and businesses do not pay wholesale prices for their electricity, but the market is a key determinant in how many bills could rise by next year.
But, alas, neither renewables nor coal set the price of electricity. That privilege belongs to gas, which most often bids last and highest in the NEM auction process.
And so, what was deflation to days ago, is now rapidly turning inflation as the spot gas market jacknifes NEM prices higher:
Given the Asian spot price is around $29Gj, the export cartel has a huge arbitrage to close to local prices still at $14Gj.
It will first hit the $12Gj cap for contacts and then push the spot price higher because stupid Albo did not apply price caps to that market.
Electricity futures are still about double spot rates and that is where spit will go before long:
There is still some bill relief coming for Q1, 2024 but the conditions for a new price shock are already developing.
For all the blather about coal versus renewables, it is still gas that matters far more than either.
