First day under the carbon tax – how have spot prices changed?


It’s Sunday 1st July 2012, so it’s timely to see how spot prices have changed with the advent of carbon pricing.

Using NEM-Watch v8, we have included before and after screenshots below to provide some contrast in a market context that is otherwise very similar between Saturday 30th June 2012 (pre-tax) and Sunday 1st July (with the tax):

Saturday 30 June
at 15:25 dispatch interval

Sunday 1 July
at 15:00 dispatch interval

2012-06-30-at-15-25-NEM-Watch-pretax 2012-07-01-at-15-00-NEM-Watch-posttax
On Saturday afternoon, we see that the NEM-wide demand is 21,767MW and prices for all regions are in the range of $31.25/MWh to $36.71/MWh On Sunday afternoon, we see that the NEM-wide demand is 22,087MW (a negligible difference of only 320MW) and that prices have risen to be in the the range of $51.07/MWh to $64.69/MWh

The colour-coding of the price boxes in NEM-Watch make it readily apparent how the prices have changed (click on the images for a larger view).

It is overly simplistic to compare single dispatch intervals (pre- and post-) to form any definitive understanding for how prices have changed under the carbon tax regime (and it is possible that a number of weeks or months will need to pass before generators settle on trading strategies adjusted to the new environment) but the following table provides some early indications:

Price on Sunday
(including tax)
Price on Saturday
(pre tax)
Increase
QLD $52.45/MWh $31.25/MWh $21.20/MWh
NSW $58.56/MWh $32.00/MWh $26.56/MWh
VIC $63.36/MWh $36.71/MWh $26.65/MWh
SA $64.69/MWh $35.95/MWh $28.74/MWh
TAS $51.07/MWh $32.94/MWh $18.13/MWh

With respect to this crude comparison, it is not warranted to conclude any more than that prices have risen (across the NEM) by about as much as was intended in the design of the scheme.  A time-series of prices (also from NEM-Watch) is shown in the following image to highlight the transition at midnight:

2012-07-01-prices-from-nem-watch

Like many others, we’ll continue to watch with interest (with NEM-Watch, ez2viewAustralia, NEM-Review and other tools) to see how the market continues to evolve to address this new reality.

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

3 Comments on "First day under the carbon tax – how have spot prices changed?"

  1. The comparison table illustrating the changes does not include the NT. As a resident of the NT I would be interested in seeing the before & after affect of the CT

    Thanks & Regards

    Pat O’Connell

    • Hi Pat

      The NT is not part of the NEM – so we can’t help you there, in terms of what’s happening up that way. Perhaps the esaa might be able to help?

      Paul

      • Pat, Paul,
        NT is a fully regulated system so Power and Water Corporation would have to apply to the NT utilities commission for an increase to retailer prices based on the increases to their cost due to the carbon price. Their website is http://www.utilicom.nt.gov.au/ where you may find some more info.

        Cheers,
        Ariel

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