In part two of this two-part series we discuss our long-term expectations for wholesale electricity prices in the NEM to 2040, derived from our quarterly Australian Electricity Outlook (AEO). Modelling considers two key pathways for the future development of the NEM, including our Central case for the “current transition” of the market, and an Alternative case, reflecting AEMO’s “step change” shift to renewable energy in line with a “well below 2°C” carbon budget under the Paris Agreement.
As asset owners and investors seek to make informed long-term decisions, modelling provides an independent view of price dynamics in each region of the NEM, underpinned by the likely economic effects of different technology pathways, and the impact of renewable energy and new flexible capacity on competitive market dynamics, providing an important reference point for future investment and policy decisions.
Modelled scenarios for the NEM
Modelling of scenarios serves an important role in understanding the impact of potential futures on the market, helping decision makers to assess potential risks, opportunities and development needs in the NEM. While there are many combinations for possible future market development, the scenarios modelled within our AEO capture two key
Data shows what’s happening. Our research insights explain why…
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