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Australian Renewable Energy Market Update – June 2023

1 Jul 2023

Retailers Mojo Power and QEnergy Collapse 

Ongoing high prices and volatility in wholesale markets have claimed the demise of a further two retailers on the east coast, with both Mojo Power and Brisbane Based QEnergy collapsing in the last 2 weeks.

On the 17th of June, both were suspended from trading on the National Electricity Market by AEMO and the Retailer of Last Resort process was initiated – meaning the ~17,000 affected customers would be transferred to another retailer. This event is  a continuation of market conditions which saw six retailers collapse during 2022, citing a rise in wholesale market and hedging costs whilst being restricted from passing on these costs on to customers through the Default Market Offer (DMO) regime.

Mojo Power was founded in 2015, with a mission to challenge market incumbents and offer customers greater access to green energy. However, through a combination of increased competition and higher wholesale energy costs retail margins have come under significant pressure in recent years. The ACCC reports that the average annual retail margin across the National Electricity Market (NEM) per residential customer has declined from $145 in 2016-17 (real terms), to just $35 per customer in 2021-22 – putting significant pressure on the Tier 2 and 3 retailers operating in the NEM. 

NEM Winter Readiness 2023

The annual seasonal readiness report is published by AEMO and provides the market guidance as to the expected resilience of the electricity and gas network over the winter. This year’s report highlights a number of watch areas but notes a much-improved system readiness when compared to 2022.

Highlights include:

  • Approximately 2200 MW of additional VRE / BESS capacity is expected to be operationally available in the NEM compared to winter 2022. Note: solar capacity factor is significantly lower during winter months.
  • Report predicts El Nino weather patterns will result in below median rainfalls for inland NSW corresponding to improved irradiance when compared to 2022.
  • AEMO Forecast Unserved Energy to remain under both the interim and reliability standards for all NEM regions during winter 2023. However, they have flagged a risk of load shedding (albeit low) where high demand days combine with low VRE availability and or scheduled generation and network outages.

Gas storages are currently at high levels (Iona, Dandenong and Newcastle LNG), however Longford Gas Plant (Vic) is producing 20% less than last year. 

Did you know?

The Salmon Beach Wind Farm was opened near Esperance in 1987 as the first wind farm in Australia. It had six turbines and operated until 2002.