Energy Market Trends for February 2025
Electricity Market: February 2025 featured persistent concerns around energy affordability, compounded by volatile renewable output and political polarisation around Australia’s energy future.
Market Dynamics Retail electricity prices rose sharply in Victoria and South Australia, with average increases between 10% and 12% compared to February 2024. Wind and solar underperformance during key periods amplified reliance on backup gas and coal generation, prompting a surge in wholesale prices.
Policy Debates The National Party formally endorsed a proposal to deploy small modular nuclear reactors (SMRs) in regional Queensland by 2040. The move escalated the national nuclear debate, with Energy Minister Chris Bowen reiterating his opposition and affirming the government’s renewable-first policy agenda.
Infrastructure Challenges A final decision on transmission access to NSW’s Southwest REZ—initially expected in December 2024—was again delayed, with EnergyCo citing the need for additional environmental assessments. Developers expressed concerns about rising costs and project viability.
Natural Gas Market: The gas sector navigated complex regulatory developments and increasing investor anxiety amid delays and policy uncertainty.
Policy Changes The Northern Territory government issued conditional approvals for exploratory drilling in the Beetaloo Basin. While the decision was welcomed by the industry, legal and cultural objections from Traditional Owners raised the prospect of further delays.
Market Pressures Pipeline congestion between Queensland and the southern states became acute during periods of peak demand. Infrastructure operators called for urgent investment to expand transmission capacity and prevent market segmentation.
State-by-State Overview New South Wales (NSW):
-
Electricity: Policy uncertainty and REZ delay further stressed the market.
-
Natural Gas: Pipeline bottlenecks limited supply responsiveness.
Victoria:
-
Electricity: Sharp retail price increases fueled debate about transition costs.
-
Natural Gas: Investor concern grew amid regulatory unpredictability.
Queensland:
-
Electricity: The SMR proposal intensified discussions on nuclear energy.
-
Natural Gas: Transmission constraints flagged during peak periods.
South Australia:
-
Electricity: Wind underperformance highlighted the need for storage solutions.
-
Natural Gas: Cross-border supply concerns persisted.
Western Australia (WA):
-
Electricity: Delays in key projects drew industry criticism.
-
Natural Gas: Stable LNG exports, but future domestic supply plans were questioned.
Policy and Regulatory Updates
-
Nuclear Energy Debate: SMR endorsements brought national attention to the nuclear option.
-
Beetaloo Basin Approvals: Conditional go-ahead faced cultural and legal headwinds.
-
Transmission Planning Delays: NSW REZ access remains unresolved.
Conclusion February 2025 underscored the volatility of energy markets amid changing weather patterns and infrastructure lag. Political divergence over nuclear energy, transmission access delays, and pipeline congestion all point to the need for cohesive and forward-looking energy governance.
Contact Us Today at Austech Power & Gas, we help you navigate complex energy challenges. Whether you're addressing tariff impacts, integrating renewables, or planning for future supply, our strategic solutions are tailored for resilience and growth. Contact us to build your 2025 energy roadmap.