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El Niño declared in Australia: how will this impact wholesale energy prices?
The Australian Bureau of Meteorology has stated that Australia is now officially under the influence of the El Niño climate pattern. El Niño, known for causing warmer water in the Pacific Ocean, greatly affects global weather patterns. But what does this mean for your business's wholesale energy prices?
Understanding El Niño
El Niño is a weather pattern that occurs periodically. It leads to higher temperatures and reduced rainfall, particularly in eastern Australia. This combination not only affects our day-to-day life but also has a direct impact on energy prices.
The impact of El Niño on wholesale energy prices
Changes in temperature and rainfall directly affect energy demand. For instance, warmer temperatures can increase the demand for air conditioning, leading to higher electricity consumption. On the other hand, reduced rainfall can affect hydroelectric power production, leading to potential energy shortages.
"We expect that as temperatures begin to rise, the price of wholesale electricity will follow," explains Blaine Chippendale, Commercial Energy Consultant at Zembl, "this is due to increased demand... once everything begins to heat up, generators can't output the same amount of energy through transmission lines. Meaning the price starts to increase, we have already began to see this happening."
Increased demand coupled with potential supply shortages often leads to price volatility, causing a rise in wholesale energy prices for businesses in Australia.
Preparing for the future
By being proactive and planning ahead, businesses can mitigate the impacts of El Niño on their energy costs.
"If your contract is coming to an end in the next 12 months, you can begin to compare electricity prices now," says Blaine, "December is one of the biggest contract end dates in Australia. We are already finding that increase for the majority of businesses in Australia to be excessive based on where the market is currently sitting."
At Zembl, we believe in empowering businesses to make informed decisions about their energy usage. We are here to help you every step of the way, providing insights, advice, and support to ensure you secure competitive energy rates.
The time to act is now
While we can't control the weather, we can control how we respond to it. At Zembl, we are committed to helping businesses navigate through these turbulent times and secure competitive energy rates to ensure long-term cost saving.
We offer a bespoke service that helps businesses understand the energy market and make smart decisions. Our team of Energy Consultants will guide you through the process, presenting you with the most competitive options based on your business needs.
We encourage commercial businesses to act as soon as possible if their energy contract end date is coming up, to protect themselves against the wholesale energy price increases that El Niño is likely to bring.
"The best time would be to act now," Blaine warns, "we don't expect energy prices to come down any time in the near future. After we come out of the summer months, moving into 2024, there are currently talks of increasing the market caps we currently have in place."
To start the process, simply fill out our contact form below, and one of our Energy Consultants will be in touch to go through your options. We'll find you competitive business electricity rates from Australias leading commercial electricity companies.
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