December 2024 Electricity Market Review

Market Commentary

December spot prices dropped in all states apart from South Australia after very high prices in October and November. Electricity prices in December 2024 were on average much higher than they were in December 2023. 

New South Wales and Queensland experienced the sharpest drops in spot pricing, but that is explained by the severe increase the month before due to supply and demand conditions impacted by transmission infrastructure capacity, hot weather and longer-than-expected outages of generation assets.  

The drop in spot prices was further affected by the Christmas holiday shutdown when businesses and industry wind back operations, reducing overall demand on the grid. 

Across the National Electricity Market, spot prices were on average 25 percent higher in December 2024, compared to the same month in 2023. 

South Australia experienced a 29% increase, New South Wales 26.4 percent, Queensland 26.1% and Victoria a 15.9% increase. 

Wholesale futures prices increased very slightly in December in all states apart from South Australia when compared to the previous month. However, futures prices were elevated when compared to the end of 2023. An average taken from New South Wales, Queensland, South Australia and Victoria showed a 9.2 percent increase in wholesale futures across the National Electricity Market by the end of 2024. 

NSW experienced the highest increase at 18.6% followed by Queensland at 17.8% and Victoria at 10.1%. South Australia experienced a drop in prices of 7% compared to December 2023. 

It is also worth noting that now might be the time to check your energy contract expiration date as you enter the new year to avoid being forced into expensive last-minute deals. You can forward purchase an energy contract on the wholesale market even if your current deal has not yet expired.  

Coalition gives costings for its nuclear plan 

The Coalition released its costings for its nuclear plan should it win the next general election. The plan, which relies on a smaller economy and higher carbon emissions, is estimated to cost over $300 billion.  

The Coalition’s costing, prepared by Frontier Economics, claims that a nuclear-inclusive system would be cheaper over 25 years than one without it. However, this contradicts findings from CSIRO and AEMO, which state that nuclear power is twice as expensive as renewables. 

CSIRO’s GenCost reports says renewables are the most cost-effective replacement for coal and gas  

The Commonwealth Scientific and Industrial Research Organisation’s (CSIRO) annual GenCost report, released in draft form for 2024/25, reaffirms that integrated renewables are the most cost-effective option for replacing Australia’s ageing coal and gas generators. The report highlights significant cost reductions in solar PV and battery storage, with batteries down 20% and solar 8% in the last year. Wind prices have risen slightly but are expected to peak soon. 

Renewables have been the lowest-cost new-build electricity technology for seven years. The report notes easing inflationary pressures but mixed impacts on supply chains. Gas prices have risen due to new “hydrogen-ready” generators. 

CSIRO’s chief energy economist points out that even with added firming costs, renewables remain the cheapest option, with costs around $120/MWh short-term and $82/MWh by 2030. Unabated coal and gas are the next cheapest but are problematic due to emissions. Nuclear is much more expensive, with large-scale nuclear costing 1.5 to 2.5 times firmed renewables, and small modular reactors 4 to 6 times higher. 

Federal minister Chris Bowen emphasizes that renewables, firmed by gas and pumped hydro, are key to reliable and affordable energy, criticizing past and proposed nuclear plans for being costly and unreliable. 

New renewables capacity will power Australia through the summer – AEMO  

Australia will be powered through the 2024-25 summer by over 3 GW of new solar, wind, and battery storage, with a 60% increase in storage capacity ensuring reliable electricity supply. The Australian Energy Market Operator (AEMO) notes that while weather and generation conditions will be similar to last summer, 3,175 MW of new projects, including 1,010 MW of solar, 940 MW of wind, and 750 MW of batteries, have been commissioned. An additional 750 MW will be operational by December. Western Australia’s grid also benefits from 425 MW of new battery capacity. AEMO highlights the crucial role of batteries in managing challenging conditions, with the Waratah Super Battery set to become Australia’s largest. However, summer risks include extreme weather, generator outages, and high demand. 

More renewable energy records set  

This year’s renewable energy record season has extended from spring into summer, breaking numerous records for large-scale wind, solar, rooftop PV, and overall renewable generation in Australia’s National Electricity Market (NEM). New capacity and excellent generation conditions led to a peak instantaneous output of 23,619.5 MW for variable renewables (VRE) and a total renewable output of 24,213.8 MW. 

On Monday, 2 December, there was also a significant drop in Victoria’s coal and gas power share to 21.9%. The growth in renewable energy highlights a shift away from fossil fuels and reflects Australia’s targets of 82% renewables by 2030 and 95% in Victoria by 2035. 

Victoria’s second-largest battery completed  

Victoria’s second-biggest battery, the 200 MW, 400 MWh Rangebank Battery Energy Storage System (BESS) in Cranbourne, has been completed by Eku Energy and Shell. Under a tolling agreement, Shell Energy will access 100% of the battery’s capacity for 20 years.  

The project marks Shell’s first grid-scale battery investment in Victoria and globally. The battery supports a resilient power system and complements renewables. Rangebank BESS is Eku Energy’s third global battery project. The Community Grants Program associated with the project supports local schools and not-for-profit groups. Victorian energy minister Lily D’Ambrosio welcomed Rangebank’s contribution to the state’s energy storage targets. 

UNSW Sydney Develops High-Capacity Proton Storage Material for Batteries  

A team of scientists from UNSW Sydney, led by Professor Chuan Zhao and PhD candidate Sicheng Wu, has developed an organic material, tetra amino-benzoquinone (TABQ), for proton storage. This material has enabled the creation of a rechargeable, all-organic proton battery effective at room temperature and sub-zero conditions. Proton batteries offer a safer, higher-capacity, and fast-charging alternative to lithium-ion batteries. They address the limitations of current battery technology, such as reliance on rare earth materials and recycling difficulties. The TABQ-based battery has a long cycle life of up to 3,500 charge/discharge cycles and shows significant potential for next-generation energy storage and renewable energy enhancement. 

(Learn more about the TABQ proton battery from UNSW here.)  

New South Wales

Wholesale Electricity Base Load Futures:

*The ASX has ceased to report on electricity futures prices for the year 2024. As a result, reporting now covers the years 2025, 2026, 2027

Average Movement Summary:

New South Wales electricity futures prices for 2025 began the month at $130/MWh, climbing sharply to $140/MWh, closing the month at $135/MWh. 

Prices for 2026/27 followed the same trend but at a cheaper price. Prices have dropped significantly since the crisis in October 2022 but are still $32/MWh costlier than the same period last year.  

Start comparing current market offers and make your procurement process a breeze. Take the first step and get started here!  

Commentary:

• New South Wales spot prices relaxed somewhat in December after a huge spike the previous month. Prices dropped from an average of $219/MWh to $134/MWh.  
• Electricity spot prices in December 2024 are almost double what they were in 2023 when the average price was $68/MWh. 
• New South Wales continued to endure high volatility on the spot market with three incidents of pricing almost hitting the market cap.  
• The bulk of trading took place at around the $120/MWh mark. Incidents of negative pricing numbered around 1,500, with a maximum low of -$1000/MWh.  
• Renewables shares in December 2024 remained stable at 42.1%. Reliance on gas dropped from 2.2% to 1.8%. Coal contribution remained stable at 55%. 
• There was a small 0.2% contribution to the energy mix by large-scale batteries in December, costing an average of $237/MWh. Gas generation costs dropped from $790/MWh to $293/MWh, which is still high. Renewables dropped from $244/MWh in November to $99/MWh which is around double their usual price. Coal dropped from $269/MWh to $137/MWh.  

Start comparing current market offers and make your procurement process a breeze. Take the first step and get started here!  

Victoria

Wholesale Electricity Base Load Futures:

*The ASX has ceased to report on electricity futures prices for the year 2024. As a result, reporting now covers the years 2025, 2026, 2027

Average Movement Summary:

Victoria futures prices opened the month at $80/MWh. Following the same trend as NSW, futures prices climbed sharply to $86, before correcting slightly to close the month at $84/MWh.    

Prices for 2026 and 2027 followed the same pattern but at a cheaper cost.  

Electricity prices have fallen significantly since the crisis in October 2022, but they are still $16/MWh higher compared to the same period last year. 

Start comparing current market offers and make your procurement process a breeze. Take the first step and get started here!  

Commentary:

• Victorian average spot prices dropped from $64/MWh in October to $52/MWh in December 2024. 
• Electricity spot prices are around double what they were in 2023 for the same period.  
• Victoria’s spot pricing was relatively low, with the highest trading price registered at $768/MWh. The bulk of the trading occurred around the $50/MWh mark.  
• Incidents of negative pricing increased from around 2,500 to around 3,000 with a low of lows of -$450/MWh. 
• The share of renewables in generation dropped slightly to 46% stable at 47%. Coal dropped from 59% of the energy mix to 52.5%. Gas increased dropped from 2.3% of the generation mix to 1.5%.   
• Batteries contributed 0.5% to the Victorian energy mix, costing an average of $97/MWh. The average cost of renewables dropped from $53/MWh to $31/MWh. Coal increased from dropped from $87/MWh to $64/MWh and gas increased from $157/MWh to $171/MWh.    

Queensland

Wholesale Electricity Base Load Futures:

*The ASX has ceased to report on electricity futures prices for the year 2024. As a result, reporting now covers the years 2025, 2026, 2027

Average Movement Summary:

Queensland futures electricity prices opened December 2024 at $111/MWh, spiking to $127/MWh and closing the month at $120/MWh. Prices for 2026 and 2027 followed the same trend but at a cheaper cost.  

Electricity prices have come down since the crisis in October 2022 but are $37/MWh costlier than the same period last year.  

Start comparing current market offers and make your procurement process a breeze. Take the first step and get started here!  

Commentary:

• Queensland electricity spot prices dropped from $177/MWh in November to $134/MWh at the end of December.  
• Queensland spot prices are significantly costlier than they were in December 2023, when the average price was $93/MWh.  
•  Queensland experienced a volatile month on the spot market with eight instances of pricing above $10,000/MWh and a high of $16,220/MWh. 
• There were around 1,300 instances of negative pricing with two lows of -$340/MWh. The bulk of trading occurred at the $90/MWh mark.  
• Renewables in Queensland performed poorly in 2024 but picked up in the second half of the calendar year. December’s share sat at 31%. Coal generation remained stable at 60%. Gas dropped slightly from 9.3% to 8.2%. 
• Batteries supplied 0.3% of total generation. Battery energy average costs dropped substantially to $236/MWh. Gas averaged a cost of $198/MWh, coal $131/MWh and renewables cost $75/MWh.  

South Australia

Wholesale Electricity Base Load Futures:

*The ASX has ceased to report on electricity futures prices for the year 2024. As a result, reporting now covers the years 2025, 2026, 2027

Average Movement Summary:

As usual, South Australia’s wholesale electricity futures prices for December 2024 displayed a different trend from other states due to its different energy mix, of which the majority are renewables and the rest gas.  

2025 futures started the month at $108/MWh, dropping slightly to close the month at $106/MWh. Prices for 2026 followed a similar trend while 2027 prices remained flat. 

Prices have come down substantially since the crisis in October 2022 and are $9/MWh costlier than last year.  

Start comparing current market offers and make your procurement process a breeze. Take the first step and get started here!

Commentary:

• SA’s average electricity spot prices increased from $60/MWh to $61/MWh to close December.  
•  Electricity spot prices in December 2024 are $23/MWh costlier than they were in 2023. 
•  South Australia (SA) had a volatile December on the spot market. The highest price registered was $17,406/MWh and there were five instances where pricing was over $10,000/MWh.  
• Around 3,000 negative pricing incidents were recorded during December 2024 with a low of -$450/MWh. 
• Renewables share of the increased from 77% to 83%. Conversely, gas generation dropped from 22% of the generation mix to 16%.  
• Battery contributed 1.2% and averaged a cost of $150/MWh. Gas cost an average of $157/MWh, and renewables remained stable at $43/MWh.   

Take Control of Your Energy Costs 

There is also a lot of activity in the wholesale futures market as the calendar year draws to a close. Many businesses and industrial energy users are going to the market to make forward purchases of wholesale electricity while prices are relatively soft.  

It is worth observing that businesses can go to the market to secure a new contract in advance, even if their current electricity contract is still in effect. 

Depending on your business’s risk appetite, now could be a good time to secure a new energy contract. 

Act now! Reach out to one of our experienced energy consultants today and gain valuable insight into the potential costs that may lie ahead. Don’t wait—take control of your energy expenses now! 

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Contact our team for advice on reducing electricity costs and improving your business’ energy sustainability. We are here to assist you and explore your options together. 

Explainer:  Why we focus on Wholesale Futures Prices

Wholesale Futures Price: This reflects what the market expects wholesale electricity spot rates to be in future periods. The offers that commercial and industrial (C&I) customers receive via Leading Edge Energy are closely correlated to wholesale prices on the ASX Energy futures market; this is why we focus on these prices in our commentary.

Spot Price: This represents how much the spot market is charging for electricity currently based on demand and supply. Spot prices go up when demand is high and supply is tight. You can view live Spot Prices here. 

You can learn more about the difference between wholesale electricity futures and spot prices in our blog section.

Disclaimer: The information in this communication is for general information purposes only. It is not intended as financial or investment advice and should not be interpreted or relied upon as such.

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