A recently-released report from Energy Quest has analysed a number of factors affecting Australia’s supply and demand of electricity and gas in April 2022, causing prices to spike.
Energy Quest’s Australian LNG Monthly April 2022 report highlights the steep climb in energy prices along Australia’s east coast, and points out the reasons behind the price hike.
The report found that electricity prices jumped in Queensland and New South Wales, averaging $220/MWh and $187/MWh, respectively, in April.
As of 12 May 2022, these prices have continued to climb to over $500/MWh in New South Wales and Queensland.
In the same month, Australian coal-fired and renewable generation dropped due to seasonal reasons, leaving increasing demand on gas.
Queensland gas prices increased to over $15/GJ in April, and in May this increased to over $30/GJ.
Short-term gas domestic gas prices saw increases too. Prices for Queensland gas in April averaged $16.34/GJ at Wallumbilla and $16.76/GJ in Brisbane.
In Sydney, prices averaged $16.12/GJ, while Victoria saw an average of $14.53/GJ.
For gas, there is a strong demand for liquified natural gas (LNG) internationally, which has also affected prices. According to the International Group of LNG importers report, Australia was the largest LNG supplier in 2021 (followed by Qatar, the US and Russia).
One of the factors influencing these changes is the increase in east coast LNG shipments, with 31 cargoes in April compared to 28 in March. The report found that east coast projects shipped less to China and Korea in April, and more to Japan and Singapore.
Coal seam gas production is another influencing factor, with lower production rates in April than in March. The exception was southern gas production in Moomba and offshore Victoria, which was up in April, allowing gas to travel north to Queensland.
The report also highlighted that the increase in international gas prices also had an effect on prices domestically.
More information can be found in the report here.