The AER’s report also provides insights into the outlook for energy prices and demand in the coming months.
The report notes that international liquid natural gas spot prices increased during the quarter and are trending upwards, in line with usual expectations when the Northern Hemisphere enters winter, and heating demand rises. However, the impact of the European winter on prices is likely to be mild compared to 2022 due to European storage levels reaching targets early in the season.
Closer to home, the Iona gas storage facility ended the quarter with record-high storage levels. This, combined with forecast gas surplus conditions, means that market participants are better placed to manage gas-powered generator demand peaks over summer, should they materialise.
Overall, the AER’s report is a positive sign for Australian energy consumers. Lower wholesale prices are likely to flow through to lower retail prices, providing some relief for households and businesses who are facing rising costs of living. Read more about Cost of Living Crisis in Australia: Power Bills to Soar By Up to 25 Per Cent and Consumers Warned Of Electricity Price Spikes Of At Least 20%: Steps In Reducing Energy Consumption.
The report also highlights the growing role of renewable energy in the Australian energy mix. Rooftop solar output is at record levels, and new wind, solar and battery projects are coming online. This is helping to reduce demand for fossil fuels and lower emissions.
