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Price Contagion Spreads into Forward Market

Hi Folks,
Unfortunately the spot price impacts of a long hot summer, Federal policy uncertainty, potential delays in delivery of large renewables projects, all appear to have kicked into the forward market for electricity. The graph below, courtesy of our Quantitative Analytics partners SavvyPlus, "SavvyBI" service, shows the recent run up in forward contracts.

State Government Energy Rebate Scheme
Goanna has continued it's support for Commercial and Industrial Energy Users working with Tasmania's Peak Industry Bodies to highlight the importance of extending the State Government's Energy Rebate Scheme into the 2019/20 Financial Year, as Forward contracts for 2019/20 at $97/MWh remain well above the $85/MWh trigger level set for 2018/19. Minister Barnett's office have indicated their awareness of the importance of the State Government Energy Rebate Scheme, which is currently in place until 30 June 2019. We are looking forward to the State Budget announcements for some positive news, whilst Treasury works on a longer term solution to our Wholesale electricity "Market". If you're not sure if your Energy Rebate is for the correct amount, or whether your business qualifies for this Rebate, please feel free to call Marc on 03 6223 7253.

AICD MEMBERS: Applying Capital to Mitigate the Impact of Rising Energy Costs
On Tuesday 30th April the Australian Institute of Company Directors (AICD) will be holding their Members Only Breakfast Briefing in Hobart. Marc (a GAICD) will be presenting on Due Diligence for Renewable Energy Investments. Tasmanian businesses are finding innovative ways to apply capital to the problem of rising energy costs and Marc will highlight some of the triumphs and tribulations of diverse renewable energy projects ranging from $100,000 to $30M. To book your seat contact AICD Engagement Executive, Karen Clarkson on 6242 2203 or e-mail kclarkson@aicd.com.au 


Water in Storage
Hydro Tas Storage levels are at 31.4%, which SavvyBI says is around 2-3% below the 10 year average for this time of year.

Large Generation Certificates (LGC's) have continued their decline and are currently trading at around $34/Cert on the Spot Market but the forward market tails off very quickly to $10/Cert for Calendar 2022 & 2023, as shown below.

LGC pricing has become the new battle ground for Tasmanian electricity Retailers. Goanna has recommended the leading Retailer position on several prominent market engagements, based not on energy commodity pricing differences, but on significant differences in Renewable Energy Certificate pricing.  The Clean Energy Regulator has announced the annual LGC Renewable Power Percentage (RPP) to 18.60% (& STP 21.73%) for Cal 2019, meaning the importance of the accurate evaluation of LCG's in energy tenders has also increased.

Following supply restoration in early June 2018, Basslink got busy exporting to Vic (shown in Green below). During Q3 2018 despite average Vic spot prices being around 7c-10c/kWh, many trading intervals recorded 29c/kWh settlement periods.


2018 Renewable Energy Generation saw Hydro Tas create a whopping 2 Million Large Generation Certificates (LGC's) by running Gordon, Poatina, Liapootah and several others over their Baseline levels and exporting a good deal of the energy to Victoria.



Goanna Welcomes Dr Andrew Wadsley to the Team
Goanna Energy Consulting Managing Director, Tracy White is delighted to announce the arrival late last year of Dr Wadsley to the growing Goanna team. Andrew has more than 43 years’ experience in the upstream oil and gas industry. Current industry courses, presented by Dr Wadsley, include: “Exploration to Market: Fundamentals of the Eastern Australia Gas Supply Chain”, “Quantifying Uncertainty and Risk in Oil and Gas Projects” and “Advanced Reservoir Simulation”. He is the author of industry standard software currently used by ExxonMobil, Santos and Oil Search (amongst others) for the planning and development of gas supply networks. Andrew’s assignments for Goanna have included evaluation of large Natural Gas “Commodity” tenders for Tasmanian Natural Gas clients along with some Top Secret projects. Welcome Andrew!


Gas Spot Market Update: 
As Summer seemed to depart our beautiful Island over the weekend, the Wind Chill Factor became noticeable and our RC/AC was switched back to "Heat Pump" Mode for the foreseeable future. So to  Natural Gas Spot prices kicked from 10's to 11's, as shown below.



DSG On-Farm Energy Audits
March saw Goanna test its new V6 Amarok on some steep boulder strewn hills amongst the sheep in search of Private Electric Poles.  Goanna Energy Auditor, Murray Stephenson, was visiting several of the State's leading Primary Producers. With Murray discussing their growth plans and ensuring new Irrigation Scheme investments are both Energy Efficient and Future Proof. In addition to cost pressures faced by all businesses, Primary producers are facing several additional challenges on the energy front, including "Embedded Energy" costs in water delivered from new Irrigation Scheme's, the move to Maximum Demand based Network costs, the changing nature of Peak Versus Off Peak Energy times, as Coal is replaced by Renewables and how Pumped Hydro systems could outplay irrigators, with a voracious appetite for "Off Peak" Energy.

We felt privileged to see first hand, how management responsibility for the family farm is transitioning between generations and the implications of this transition across the spectrum of business and investment decision making.

For information on Australian Standard Energy Audits and Energy Efficiency Advice Contact Goanna Affiliate Consultant, Murray Stephenson at Murray@goannaenergy.com.au or access details of the DSG On Farm Program
at https://www.stategrowth.tas.gov.au/business/sectors/food_and_agriculture/on-farm_program  


TSBC Project Marinus Submission on Second Vic - Tas Link
The Tasmanian Small Business Council commissioned Goanna Energy to provide a Submission to TasNetworks’ Project Marinus, Project Specification Consultation Report. The TSBC submission focuses on Small Business & Consumer Impacts. Copies of the TSBC Submission are available via email from marc@goannaenergy.com.au or, once back up and running, copies of all submissions may be found at TasNetworks Project Marinus Submissions.


Finally
If energy costs are continuing to impact on your business profitability, perhaps it's time to upgrade to First Class Energy Cost Management. Our latest multi-site client to sign onto the BI immediately identified annual cost savings of over $160,000 from some very simple changes and are now reaping the benefits on their monthly account. Call us now on 6223 7253 for your in house demonstration of our market leading cloud based and mobile Energy Business Intelligence platform, SavvyBI.

Did you know more than twice as many people read our newsletter than we have Subscribers? If you're currently receiving a forwarded copy but would prefer to be the first to know, feel free to Subscribe Here.



We look forward to helping you soon, all you need to do is call us! 

John Devereaux
Renewable Energy and Solar/Battery Business Case Validations, Energy Policy & Energy Consumer Advocacy.
0418 139 498
Russell Reid
Natural Gas & LPG Supply, Gas tenders & Gas Invoice checking.
0419 360 403
Sead Pasalic
High Voltage Asset Management, HV Conversions & New Commercial/Industrial Electricity Connections.
0414 258 241


Find out more
Want to know more about Goanna Energy services? Phone Marc White on 6223 7253 for more information or follow us on Twitter at https://twitter.com/MarcBWhite


Whilst Goanna Energy Consulting Pty Ltd has endeavored to ensure that the information contained within this newsletter is accurate, we do not make any warranties or representations in relation to the accuracy of the information contained herein.
 
This newsletter is intended as general advice only and is not intended to constitute personal financial product advice. It is has been prepared without taking into account the personal circumstances, financial needs or objectives of any one person or organisation. Accordingly, individuals or organisations who seek to rely on information contained within this newsletter should undertake their ow
n independent enquiries and seek legal or financial advice prior to doing so.

 
Disclosure: Tasmanian Energy Brokers Pty Ltd is an affiliated business of Goanna Energy Consulting Pty Ltd.

Copyright © 2019 Goanna Energy Consulting Pty Ltd, All rights reserved.


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