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Posted 3 years ago | 2 minute read

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Australian energy market challenges to remain, says CBA

High international energy commodity prices, retirement of coal power generation and a lull in renewables generation could result in increased gas and electricity prices across Australia’s east coast until at least the end of 2025, according to Commonwealth Bank of Australia (CBA).

In a report published on 6 July the CBA noted that spot prices for liquid natural gas (LNG) have surged as Europe looks to reduce its reliance on Russian gas, which could result in east coast Australia’s natural gas prices remaining structurally higher until at least the end of 2025, having a knock on impact on power prices.

For electricity the report noted that, like gas prices, Australia’s National Electricity Market (NEM) have surged since April. Some of the drivers of this surge are structural, while others are temporary or seasonal. However, it was the confluence of a number of these changes that resulted in the extraordinary decision by AEMO to eventually suspend trading on the NEM.

To mitigate against these high and volatile prices the report said consumers should look at opportunities to electrify their gas usage and avoid peak gas prices by limiting activity as best as possible in the Australian summer and winter where possible.

Source: CBA

GridBeyond Sales Director Australia Lisa Balk said:

“We’re seeing a perfect storm of factors impacting Australia’s energy prices. Consumers may need to adjust their activity to avoid peak prices in Australian this winter and summer. Over the coming year winter power price peaks will likely be exacerbated as the cost of fossil fuels continue to soar. Whilst Australia is still one of the largest producers of Gas and Coal Globally, we also export 80% offshore leaving us exposed and competing with global prices. With the slow transition into renewables power generation only currently totalling just over 30% of the energy market in Australia. The risk of coal power outages in both hot and cold weather raises the risk of insufficient energy supplies and possible blackouts in some areas.

“At GridBeyond we use machine learning and AI-powered technologies, driven by data science, that enable I&C businesses to participate in a wide range of grid programmes that not only bring new revenues streams and cost savings that can help businesses to mitigate against price rises, but also support the grid by ensuring power supplies remain secure for all consumers.”

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