The pandemic has also led to a lot of shifting of generator outages across the NEM as travel restrictions impacted staffing availability during this period.
This meant that at the beginning of Q2, there was lower demand coupled with delayed outages and low gas prices across the NEM, which combined to keep average electricity prices low, albeit with significant variability arising from changes in renewable output.
As April continued into May, low demand persisted while high renewables saw a significant duck curve effect during solar hours, with prices regularly at $0/MWh or below during these periods. This requires very fast ramp up of traditional sources of supply as the solar ramps down in the afternoon resulting in high spot prices in the evenings as winter demands began to appear.
From early May, line work on the Queensland New South Wales Interconnector (QNI) placed constraints on the electricity transfer limits between QLD and NSW. This meant that the volume of QLD solar output that could flow south was limited and effectively trapped within the state, leading to significant negative prices during the QLD solar hours, with spot prices getting as low as -$700/MWh.
Some volatility returned over June with frequent periods of $300 prices in the evenings broken up by sub-$40 average prices during the days. High priced periods coincided with periods of coal generator outages and low wind generation while low priced days unsurprisingly coincided with periods of high wind generation. Essentially spot prices moving inversely with wind output.
Because of these generally low prices, forward prices on the ASX declined from April onwards, seeing a tick back up in June with end of financial year recontracting of customer volumes.
Finlay Macdonald-Stack, Portfolio Trader, Trading Operations
Q2 saw the continuation of the impact of the Coronavirus which reduced domestic gas usage over the quarter. The market has seen reduced C&I usage offset slightly by a residential increase due to more people working from home.
The international LNG market has long been reflected in Japan/Korea Marker or JKM pricing. LNG producers in QLD are experiencing Force Majeure causing oversupply in the East Coast markets, with STTM and DWGM prices over the quarter being low even on very cold days. Marginal gas generation was higher due to availability of lower priced spot gas volumes.
Kelly Clark, Portfolio Trader, Trading and Operations
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An Origin Solar customer story
Ramvek: Shining a light on sustainability.
Ramvek is one of Australasia's leading fit-out companies. From construction and project management to Australian joinery manufacturing, they have an impressive client list – and while you might not have heard of them, chances are you’ll have experienced their work before.
Why go solar?
Located in the Melbourne suburb of Lynbrook, Ramvek’s head office employs around 70 staff. But it also houses a manufacturing warehouse consisting of 4000m2 of joinery manufacturing, woodworking machinery, as well as single phase equipment.
With such large ongoing electrical loads, Ramvek had to find innovative ways to reduce their grid-energy demand. In February, they contacted Origin to discuss their energy options and ultimately decided on a solar solution for the business.
Managing Director Bill Redmond explained the issue, “Sustainability for Ramvek is more and more becoming a driving value. Solar is just one of many initiatives we are undertaking to ‘go green’. Our aim is to lead with proactive initiatives rather than be led by the industry or by our clients. Our motivation to go solar was to reduce our impact on the environment and was made commercially viable by a forecasted return on investment.”
The Origin difference
Ramvek undertook an extensive business case to determine the cost/benefit analysis of going solar. Once they’d made the decision to proceed, they engaged an energy solutions broker and ran a competitive tender with multiple companies – including Origin.
First, we requested copies of bills and consumption history to drill down into a thorough analysis. We carefully examined their energy requirements and presented a detailed proposal which included a bespoke 98.6 kW solar solution. Ramvek’s new Chief Financial officer, who was already familiar with Origin’s energy portfolio, was able to recommend Origin as the retailer of choice. The agreement was signed just over 2 weeks after their initial contact with us – a genuine win-win!
One of the key challenges faced during the installation phase was meeting Ramvek’s request to have the construction completed within a tight deadline due to the COVID-19 pandemic.
Generally, a 98.6 kW system would take on average 10-days to complete. But our Solar team pulled out all the stops, reducing this timeframe by around 50% and completing installation on day five.
Amid COVID-19 restrictions, the safety of our installers and clients was paramount – and that meant a lot of work to ensure social distancing and other safety measures. Our installers planned daily measures to manoeuvre throughout each location, and through each phase, to get the job done, in the quickest possible time.
Saving money – and the planet
Now that solar is on the roof, Ramvek can expect their 98.6 kW system to yield an estimated 126,057 kWh annually. This means reducing carbon emissions by an estimated 135 tonnes of CO2-e/year1.* We anticipate they will self-consume 74% of the generation and save an estimated $26,098.00 in the first year. A boost for Ramvek. And the planet.