Retail Electricity Prices
Part 2
Customer Profile
To examine what a typical household’s energy consumption is like we have used AEMO’s Net System Load Profiles (NSLP) which represent net energy consumption in each distribution network by measuring the energy consumed going into these networks and subtracting the interval data of all customers on time of use tariffs.? Essentially, this represents the aggregate load of customers who only have their meters read periodically and face a single rate for energy. A single customer has this profile scaled over the period depending upon their total consumption for the period.
In Victoria, all household customers are required to have smart meters supplying detailed interval data, so the NSLP does not truly provide a representative profile anymore.? We have therefore chosen to only examine customers in regions where the profiles are representative and there are suitable wholesale contracts available, these regions are:
We extracted all the available data from AEMO and then assessed each of these areas’ time series data.? As an example, we have charted the data for a typical ACT customer on a flat tariff for the month of January 2023 to show how variable this profile is, which can be seen in our title image.
Energy Market Purchase Costs
Our next analysis is to calculate the annual average purchase cost of energy for each of the network areas we assessed were suitable.? For this calculation, we valued each settlement period’s consumption and aggregated across the whole year, allowing us to derive a price per MWh for each network area. There is a delay in AEMO collating this data, so 2023 for all states is only up until the 6tth of May. Figure 2 shows the results for NSW and ACT.
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In Queensland, we analysed both of Energex and Ergon network customers, which are shown in figure 3.?
Figure 4 is for South Australia, where there is only one distribution business for the whole state.
These portfolio cost results are a snapshot of potential costs for a retailer.? It can be observed that there is often a significant variance from year to year in Queensland and especially South Australia.? Prior to 2022, NSW usually had limited variance, but 2022 was much higher in all regions, being between 2 to 3 times higher than previous years.? In the year to date (2023), the portfolio costs are closer to years before 2022.
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Note: This information is not financial or investment advice, but solely the opinion of the author.