Q2 2023 Energy Market Update

It’s Chris here, co-founder and co-CEO of Amber, sharing our Q2 2023 Market Update on the state of the Australian energy market, how it affects Amber customers and what we expect going forward. 

2023 has started off with a big start to the year for the energy market:

• We’ve started the year with record output from rooftop solar and large scale renewables, which has driven down demand in the grid to new all-time lows and kept wholesale prices extremely cheap (especially during sunny periods)

• This rapid uptake of renewables means that coal and gas are being increasingly outcompeted in the market. We saw another sign of this with the shut-down of Liddell, one of Australia’s oldest and most polluting coal plants, in April.

• We’re also starting to see a rapid increase in EV sales - with April sales reaching 8x times higher than a year ago! It definitely feels like we’ve reached a tipping point now (they seem to be everywhere!)

On the flip side of these more positive developments, we’ve also seen confirmation of how traditional retailers are planning on massively increase their prices this year:

• The regulators have indicated that the reference prices are going up by 20-30% from 1st July - that’s the equivalent of up to $500 for a typical household, which really couldn’t come at a worse time given the cost-of-living pressure that so many people are experiencing

• Big retailers have already pushed gas prices up massively at the start of the year, and have been open about the fact they are intending to do the same when they get the chance from 1st July

From where we stand this all seems a bit bonkers. Last year Russia’s invasion of Ukraine caused a genuine energy crisis, and so it made sense that prices were high as the world tried to adjust. But the energy crisis has largely abated, and it seems incredibly perverse for big retailers to likely make record profits next year while everyday customers are struggling.

The good news for you is that Amber customers can actually avoid these price rises. Wholesale prices are forecast to be much lower and more consistent over the next 12-18 months, which makes it a great time to be going direct to wholesale. 

Although wholesale prices are decreasing overall, we still expect to see some volatility during the day where evening prices are much higher than day time prices (as the sun goes down). For our Amber for Battery customers, these times provide a great chance to support the grid and earn high FITs. We expect this to continue as more coal and gas power plants shut down (and become replaced with solar + batteries). 

Looking ahead to winter

As we enter autumn and winter, we do expect to see some increases in wholesale prices as is becoming normal at this time of year. Unlike last year though, we’d expect these increases to be smaller and then reducing again from August onwards. One key point to watch out for is that we typically see higher usage during the winter, which is the big contributor to higher bills as heating tends to use more energy than air-conditioning.

For Amber for Battery customers, we anticipate average wholesale energy prices - including both usage rates and FiTs - will rise slightly as we enter into winter. This is a critical time for customers with solar and batteries to start earning high FITs during this period. We’re starting to see some customers earn big profits during this quarter by outcompeting coal and gas through Amber for Batteries - which is always awesome to see.

A great time to invest in a battery

Finally, if you interested in buying a battery,  now may be a good time to buy:

• Battery costs are continuing to fall, in particular Tesla powerwalls

• Retail prices are expected to increase between 20-30% from 1st July this year based on expected increases to the Default Market Offer (DMO)/Victoria Default Offer (VDO). 

You can find out more about how Amber can support you in getting a battery here