As we move into the final month of winter, attention is turning to how warmer weather will impact energy prices.
Warm weather a mixed blessing
Australians are coming to the end of an exceptionally warm winter, which could push future energy prices down due to lower demand for heating. However, the meteorological conditions behind the warm winter are also making an El Niño pattern increasingly likely as we head into summer. If El Niño does prevail we can expect higher prices due to increased demand on cooling systems, with energy generators tending to work less efficiently in hot conditions.
Government extends price cap on gas
As wholesale energy costs continue to soar, the Federal government has announced an extension of its price cap on natural gas until mid-2025. The price cap - which was set at $12 per gigajoule last December - should provide some relief to households and businesses by limiting price rises on wholesale gas for a further 24 months.
Renewable targets looking overly ambitious
There’s increased concern over Australia’s ability to hit the Federal government’s target of obtaining 82% of energy from renewables by 2030. Australia currently generates between 30% and 35% of its power from renewable sources, and recent research by global analyst Rystad Energy and energy advisory Nexa suggests that figure is only likely to rise to around 60% by the end of the decade, based on the current trajectory.
Budget blowout possible on Marinus Link project
Delays in completing major renewable energy projects are a key reason for pessimism over the country’s ability to reach its 2030 renewable targets, and now there’s news another crucial project is facing time-consuming obstacles. The Marinus Link project was intended to boost the country’s renewable energy supply by creating a 1500 MW undersea cable from Tasmania to the mainland. But now, the financial viability of the project is in doubt, with the latest cost estimates rising from approximately $3.1B to nearly $4B.
Rooftop solar a great option for C&I businesses
With renewable project delays and climate change increasing pressure on the NEM, installing rooftop solar is looking like one of the best ways for commercial and industrial (C&I) businesses to cope with rising energy costs. Not only will solar decrease businesses’ energy bills by increasing their self-reliance, it will help address the underlying issues of greenhouse gas pollution by raising the country’s level of renewable adoption. Plus, there are currently plenty of opportunities for solar rebates from state governments.
What can businesses do about the energy news this month?
One thing that’s constant about Australia’s energy market is its volatility. With a mix of good and bad news this month, businesses will be looking for ways to protect themselves from the downstream financial effects of El Niño while taking advantage of opportunities like solar installation.
Talking to one of Zembl’s Energy Experts is a great way to get the best of both worlds. Whether you want to lock in an energy contract for 2024 - and avoid the probable impacts of El Niño on your summer energy bills - or explore your options for installing solar, our dedicated team can help.
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