It wasn’t the horse race that led the large drop in load in NSW coincident with the race

Posted by Paul McArdle Thursday, November 5 2015 Topic: Spring 2015 in the NEM

The Melbourne Cup was on Tuesday (and we commemorated in our own special way with NEM-Watch, and in our re-opened competition for summer).

Coincident with the race, we’ve seen a number of comments in social media about the coincident (& large) drop in demand in NSW that occurred around the same  time – a number of people linking the two together.  Last year we posted both:
1)  A review on Monday prior to the 2014 race of the effect of previous years; and
2)  This review of how electricity demand changed in 2014 coincident with the running of the horses.

Here’s how this Tuesday’s change looked in NEM-Watch:

2015-11-05-at-12-05-nem-watch-nswdemanddrop-notMelbourneCup

We should clarify, however, that (as noted in the image above) the large drop in load in 2015 was not due to the horse race, exciting as that might have been…

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About the Author

Paul McArdle
Paul was one of the founders of Global-Roam in February 2000. He is currently the CEO of the company and the principal author of WattClarity. Writing for WattClarity has become a natural extension of his work in understanding the electricity market, enabling him to lead the team in developing better software for clients. Before co-founding the company, Paul worked as a Mechanical Engineer for the Queensland Electricity Commission in the early 1990s. He also gained international experience in Japan, the United States, Canada, the UK, and Argentina as part of his ES Cornwall Memorial Scholarship.

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Winter 2002 – Generator Market Power

From the start of the NEM through until 2001, the NEM was typified by a pricing dichotomy with sustained rock-bottom pricing in NSW, Snowy and Victoria and high and volatile pricing in the extremities (Queensland and South Australia).

In 2001, the QNI interconnection and many generation projects were developed. This led to the convergence of prices between all regions, and the disappearance of price volatility – circumstances that were a real threat to generator profitability.

In response, generators adopted an approach that came to be known as “the economic withholding of capacity” to engineer volatility into the market throughout winter 2002 – and hence higher prices as a result., and generator behaviour.

4 Comments on "It wasn’t the horse race that led the large drop in load in NSW coincident with the race"

  1. David Thompson | Friday, November 6 2015 at 4:58 pm | Reply

    Okay, I’m in suspense. So what did cause the significant drop in demand in NSW?

  2. Tom | Friday, November 6 2015 at 5:29 pm | Reply

    …it was Tomago Aluminium.

  3. Malcolm M | Sunday, November 8 2015 at 8:58 pm | Reply

    Th e story portrayed by the aluminium industry is that they couldn’t possibly participate in any load shedding at any time, because then all their pot lines would need to be emptied out of solid aluminium. Yet when when the problem is their side of the meter it doesn’t seem to be a problem.

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