1 Electricity and Gas Market Update - Committee for Ballarat Daley Presentati… · $2bn...

SavvyPlus Consulting Pty Ltd

1

1

Committee for Ballarat

Electricity and Gas Market

Update

6 April 2017Carl Daley


2 Agenda

WHAT IS GOING

ON?

HOW DID THIS

HAPPEN

WHAT CAN WE

DO ABOUT IT?


3 Agenda

WHAT IS GOING

ON?

HOW DID THIS

HAPPEN

WHAT CAN WE

DO ABOUT IT?


4 Future power prices have taken off …


5 and other States too!


6 Power spot prices explained …


7 Power spot prices have taken off …

Records …

• Highest Q1 average price on record in

Queensland, NSW and Victoria

• Highest March average price in Victoria

and NSW on record

• Second highest March and Q1 average

price for SA on record

• Second highest Tasmanian March and

Q1 average price on record, only

exceeded by last year when the

Basslink failed


8 Gas spot prices have taken off …


9 Victorian gas price history …


10 Lights are going out ( or threatening) …

SA System Black NSW sheds Tomago smelter to

avoid load shedding


11Record Energy Policies in 3 days

9thAEMO warns of blackouts

as gas runs out

NSW, Vic and SA face power shortages in the

next two years that may require LNG exports

to be diverted to maintain power reliability

standards, according to AEMO following

dramatic cut to domestic gas production

forecasts.

10thAEMO releases its Medium

Term Outlook

AEMO’s latest outlook predicts gas

shortages impacting power generation as

early as winter 2017, causing winter forward

prices to jump.

14th SA Energy Minister to be

given more control in state's $500m

plan to secure future

14thVictorian Government to

invest extra $20m in large-scale

energy storage

An extra $20m will be invested in Victoria's

large-scale energy storage, the State

Government says, as it works to address the

state's increasing energy needs.

15thCrisis meeting on gas as

Prime Minister fears winter chaos

Malcolm Turnbull met with gas company

executives to help secure manufacturing

jobs and provide low-cost heating for

families by bolstering domestic supply.

16thSnowy Hydro scheme

boosted by 2,000MW costing $2bn

The Federal Government announced a

$2bn intervention in Australia's electricity

supply debate, by expanding the Snowy

Mountains hydro scheme using pump

storage by 2,000MW.

March 2017

109

14 15 1615

The plan includes building, owning and

operating a $360m, 250MW gas-fired plant.

The private sector would also build Australia's

largest battery storage (100MW) before next

summer.


12 Questions ?


13 Agenda

WHAT IS GOING

ON?

HOW DID THIS

HAPPEN

WHAT CAN WE

DO ABOUT IT?


14 Base supply has tightened …

5,700MW closed

since 2012

Recent closures


15 Hazelwood Power Station closure …

Hazelwood generation March 2017 … the end of an era


16 Demand has increased … Qld LNG driven


17 NSW demand highest since 2011


18AGL Vic has reduced low price generation


19Snowy Vic has reduced low price generation


20Hydro Tasmania has reduced low price generation


21Substantial fuel switch across the NEM

Significantly less hydro, and gas running more often


22 Domestic gas is being diverted to LNG

Santos reported

as acquiring 20%

of domestic gas

and diverting for

LNG exports


23 Same demand, prices much higher

Q1 2017 vs Q1

2016


24 Questions ?


25 Agenda

WHAT IS GOING

ON?

HOW DID THIS

HAPPEN

WHAT CAN WE

DO ABOUT IT?


26 Procurement Australia

• For customers with contract

expiring in 2017

• May be able to be rolled into a

lower price agreement struck

in late 2015

• Contact Carl Daley for further

information


27 Behind-the-meter solutions

• Be careful about ‘promises’ from sellers

• Technology (and cost) is moving fast


28 Knowledge Based Strategy


29


30 Agenda

WHAT IS GOING

ON?

HOW DID THIS

HAPPEN

WHAT CAN WE

DO ABOUT IT?


31 Any further questions?


32

32 Thank you

Carl Daley

Managing Director

SavvyPlus Consulting

[email protected]

03 9081 0480

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1 Electricity and Gas Market Update - Committee for Ballarat Daley Presentati… · $2bn...

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