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Colder than Melbourne: Qld power prices surge as food costs are hit by floods

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The cold snap in south east Queensland has sent the wholesale electricity market into another spin with wholesale prices soaring and now food costs were expected to escalate from the flooding in NSW.

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Cairns and Brisbane yesterday had their coldest July day in more than 20 years along with record daily July rainfall in the east and northeast.

As temperatures in Brisbane hovered around 11 degrees this morning energy market analysts were warning the regulator may be forced back into the electricity market this evening as wholesale prices surged. The spot price for electricity in Queensland was at $2500 a megawatt hour early this morning, significantly higher than southern states where the prices were in the $300 to $400 MW/h. It dropped back after people left for work and school.

The surge in prices was attributed to the lack of solar energy and the demand from people switching on heaters.

The hike could eventually move through to impact consumers if it was sustained. The flooding in Sydney’s food bowl was also expected to pressure already high prices for leafy vegetables.

After a drop yesterday of 10 degrees in average temperatures in parts of the state, Queenslanders woke to another wet and cold morning and the Bureau of Meteorology website now tipping a maximum of only 13 degrees in Brisbane today, colder than the forecast of 15 degrees for Melbourne and Adelaide.

The bad weather may stick around for a while yet. Your Weather Channel said modelling was showing the potential for three more east coast lows or troughs off the NSW coast over the next eight days.

“Something big is brewing next week early-mid next week as a strong front breaks off into a low over Victoria and develops as a major east coast low,” the forecaster said.

 “(It’s) early days for the last scenario but model’s been showing it fairly consistent last couple of days. It’s going to be relentless if this happens.

 “Nothing is a guarantee, but something to keep our eyes glued on given the current situation and all the rain in autumn.’

The spot electricity price in Queensland hit the new market cap yesterday at $15,500 per megawatt hour, which itself was only lifted by regulators at the start of the month.

Electricity market analyst Paul McArdle said on his Wattclarity page that the volatility drove the cumulative price about $1 million and was well on the way to hitting the cumulative price threshold, which was also only increased at the start of the month.

He noted that there was very little solar energy being generated and AEMO issued a lack of reserve notice yesterday, the least severe of its alerts.

“I’ve seen others also express concern that we appear to be in a ‘rinse and repeat’ cycle … especially given the cold and cloudy conditions that nullify much of Queensland’s significant fleet of solar power production systems,” McArdle said.

 

 

 

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