Market Update July 2022

Below is a lite version of our monthly carbon & energy market update.

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• A combination of international and domestic factors pushed up prices, seeing the mainland NEM regions reach their Cumulative Price Threshold which triggered Administered pricing to occur; AEMO soon suspending the market as the situation worsened from June 15^th-24^th.
• The north-south divide continues to become more apparent with Queensland and New South Wales monthly average spot prices over $400/MWh, with the southern regions at ~$300/MWh.
• Flat Futures for CY2023 did not change appreciably throughout the month, with price increases leading up to the market suspension lost in the week after the suspension was lifted.
• LNG netback prices remained flat at $28/GJ as domestic gas prices NEM-wide rose to untenable highs which also led to the implementation of administered gas price caps in Sydney, Brisbane and Victoria; the latter still under administrative pricing.
• STCs continued to remain flat at $39.90/certificate as it remains in a STC generation deficit.
• AEMO published its 2022 Integrated System Plan, highlighting the Step Change scenario as its foundation for planning NEM investment moving forward, and emphasising that the transition to renewables is irreversible in light of recent energy market turmoil.

• ACCUs have steadied after some initial post-federal election strength with generic ACCUs settling at $35.25/certificate, and a wider range of ACCU prices based on methodologies with $2-7 premiums over generic ACCUs.

Feature 1: 2022 Integrated System Plan (ISP)

AEMO published its 2022 Integrated System Plan (ISP) on June 30^th, 6 months after its Draft ISP released in December last year.

The 30-year roadmap calls for investments in low-cost renewable generation, energy storage solutions, firming resources, transmission networks, and system services to support the continuing transition from fossil fuels to firmed renewable energy.

Feature 2: New Government, New Direction

One month on, the new Minister for Climate Change and Energy, Chris Bowen, has shown active engagement and an open mindedness approach to his portfolio, flagging his intention to pursue their emissions reduction plan through regulation rather than a vote by MPs.

Upcoming Event: Industrial Net Zero Conference 2022

Renewable Energy Hub are proud supporting partners of Industrial Net Zero Conference 2022 taking place in Sydney from 30 August to 1 September 2022.

Join our Head of Market Development and Strategy, Abhi Nithyanand in a panel discussion about the kind of policies that would make net zero by 2050 possible.

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