It’s Chris here, co-founder and co-CEO of Amber.
If you’ve been following the news recently, you would have seen that the volatility in wholesale energy prices has been getting a lot of media coverage.
Unfortunately, the volatility that we predicted a few months ago has now fully arrived and is having a major impact across the energy sector. Multiple smaller retailers have left the market, large users of energy are lobbying state governments for relief, and almost all electricity providers are flagging price rises that have either happened already, or are due to hit in the coming months.
I know many of you have questions regarding what’s happening in the energy market right now and how it’s impacting Amber, so I wanted to give you all an update and share a reminder of how our customers are protected going forward.
A recap of what’s been happening over the past few months
As we reach the start of June, we are continuing to see wholesale energy prices go up. Some of the factors we saw in April and May have intensified and a colder than expected start to winter has also played a role. As we mentioned last month, some of those key factors driving high wholesale prices include:
- Sanctions against Russia, a major exporter of coal, gas and oil driving up international coal and gas prices
- Very low wind power across Australia
- Limited export capacity on the Interconnector that sends energy between Vic and NSW
- Major coal and gas stations temporarily have gone offline, with shortages of coal further impacting many remaining coal generators
- A colder than expected start to winter driving increased energy demand.
Unfortunately, it’s difficult to predict when energy prices may settle down. Current future markets show high volatility for the next three months but with expectations that prices will start to settle down again as we move into Spring.
A reminder of how you are protected
We all understand that it can be concerning to see consistently high wholesale prices. However, we’re pleased to see that the hedging strategy we put in place 12 months ago ensures our customers are protected from these drastic price movements in the wholesale market.
Many customers will benefit from our price protection guarantee this year, which means you won’t pay more than the Default Market Offer (DMO)/Victorian Default Offer (VDO) for FY22 (and if you do we’ll credit you the difference). We have already started making early payouts on this price guarantee to help our customers smooth their bill. We’ll be doing the full calculations for the FY22 financial year in early July and will endeavour to get any credit owed to you as soon as possible.
What you can do going forward
One of the silver-linings we’ve seen during this period is the opportunity for our customers with solar and batteries to benefit from these high prices and provide some support to the grid during these challenging times.
As we noted above, one of the reasons why prices are higher than usual is because there are more generators offline than usual, so the additional energy customers can send to the grid at times of peak demand can be really valuable.
If you have solar coupled with a battery, our SmartShift product automates home batteries to export power to the grid when wholesale prices are high, and charge when prices are low, helping balance the grid. Some of our SmartShift customers are earning $50-$90 a day during these price spikes.
If you are interested in getting a solar and battery system installed or finding out more about our SmartShift program, you can email us at solarandbatteries@amber.com.au or book a call with one of our team members.
In the meantime, even if you aren’t able to buy a battery system yet, times like this are also when load shifting more of your energy use to greener times becomes extra important. The more we can use power when there’s a lot of renewable energy in the grid, the less we’ll drive demand for coal and gas and contribute to these firms’ record profits at this time. Using more renewable energy today also means more renewable projects getting built in the future, which is the only long-term path away from this fossil-fuel driven volatility.
Further ahead
We just want to reiterate that as an Amber customer you're still well protected through our price guarantee and we will be working with you to help you reduce your bills, maximise your earnings, and accelerate the transition to 100% renewables.
Please reach out to us if there’s anything we can do to help in the meantime.
