OUTLOOK: NEM wholesale electricity and LGC price forecast 2021-40

Dear Subscriber,

Our latest Australian Electricity Outlook (AEO) for the National Electricity Market (NEM) has now been published.

The AEO is a quarterly outlook for price development in each region of the NEM over both medium-term (four years) and long-term horizons (20 years). The report contains:

• an outlook for wholesale electricity prices for each region of the NEM (NSW, QLD, SA, TAS, VIC), over medium- (quarterly average prices for the next 16 quarters) and long-term horizons (annual average prices to 2040);
• an outlook for annual average LGC prices to 2030 including the potential interaction with forward Australian Carbon Credit Unit (ACCU) prices;
• forecasts for market outcomes, such as change in capacity and generation mix;
• detailed discussion of important input assumptions; and
• analysis of the major factors impacting the electricity market in the forecast period.

Given the rapid transformation of the NEM since the most recent Integrated System Plan (ISP) in 2020, the Australian Energy Market Operator’s (AEMO) 2022 draft ISP adopts an updated set of scenarios to account for the continued acceleration of variable renewable energy (VRE). The updated set of scenarios span a range of plausible futures with varying rates of decarbonisation, electricity