Pricing over recent months has been extremely low, with retail pricing dropping by over 40% from January highs. These reductions have been in part due to previously unavailable generation assets coming back on-line, but largely due to reduced demand from COVID-19 shutdowns and non-essential business closures.
The traditional “winter spike” in demand has largely been insignificant so far and the pricing trajectory is defying historical trends, with small increases during June and July but not material increases that we normally see. In fact, after initial increases early in June, pricing eased back again but has jumped up slightly more recently.
We have been able to take advantage of these conditions for customers forward contracting in advance of their contract expiry, or where possible, extending contracts in return for immediate reductions in costs. Unfortunately not all Retailers are doing these “Blend & Extend” negotiations, but for those that are the immediate reduction in costs have been welcomed by customers.
The Australian Energy Market Commission’s annual report on electricity price trends shows an overall falling price outlook over the next few years, this is encouraging and is consistent with our pricing outlook.