The sudden price surge of gas prices is due to several factors, including an unplanned outage curtailing output from ExxonMobil and BHP’s Longford gas plant in Victoria; higher demand for gas-fired power to fill shortfalls left by coal-fired power plant outages in Victoria and Queensland; and a tightening global liquefied natural gas (LNG) market.
EnergyQuest recently reported that there’s been a significant growth in gas demand post COVID-19 in both North Asia and Europe which is creating great competition from the US and Qatar, pushing gas spot prices to record levels for this time of the year.
The demand for gas was abnormally high last winter, which had a direct impact on the stored reserves, which are now much lower than normal. Additionally, supply projects have been disrupted due to the pandemic which has made the market extremely competitive.
Furthermore, ships containing Liquefied Natural Gas (LNG) will travel to the highest bidder. Due to abnormally hot conditions in Asia, the ships can earn significantly more by delivering to ports in this region.
This year, the price of carbon has risen around 70% – directly increasing the cost of electricity production and feeding directly to the higher wholesale prices. For every unit of electricity that a powerplant generates, it must calculate how much carbon dioxide it has produced at the same time and, purchase a permit to emit that. These permits are traded on the open market and, in the marketplace, powerplants that can affordably switch to cleaner alternatives do so, and only those that cannot afford to will buy the permits.
Social Energy is here to support you
The energy crisis is impacting everyone globally, so it would be normal to worry about the increase in gas prices and how this may impact you. However, customers connected to the Social Energy hub will be pleased to know that they have already protected a portion of their household energy needs from any increases.
We are committed to you and have pledged to:
- Make your bills as accurate as we can
- Raise awareness of the help and support available to you
- Make it easy for you to contact us if you’re worried about payment.
If you want to know more about the help available, please get in touch with us.