Tight supply-demand balance in SA today!

Just a quick note with reference to the following snapshot from NEM-Watch:


(Click on the image for a clearer view)

A couple of points:

1)  Temperature is up in SA again today, which is driving demand higher (within 400MW – or 12% – of the maximum all-time demand)

2)  Prices have also spiked again today, for the 3rd day in the row.

3)  This has driven the Cumulative Price to above $90,000/MWh in SA.  That’s edging towards the Cumulative Price Threshold at which price caps are imposed, under the NEM Rules.

4)  Today (unlike the case on Tuesday, which I reported here) we see the supply-demand balance in SA is actually tight.  We see that the surplus capacity in the SA “Economic Island” is less than 200MW (i.e. lucky demand is not at a peak!)

5)  AEMO has reported this as a LOR1 instance.

For those who are unaware, the following is my short-hand explanation of what the LOR levels mean:

LOR1 = a region (SA today) is below the amount of spare capacity available that AEMO would like to see.  The way they judge the “amount of spare capacity needed” is complicated (needs detailed probabilistic modelling), and they revise it every couple of years.

LOR2 = the next step up when they say that (in simple terms) if the largest unit fell offline, then we would need to be load-shedding.

LOR3 = the level they declare when they are actually load-shedding (i.e. supply does not equal demand).

Hence, as noted on the image, AEMO has declared the lowest level of alert.

6)  See in NEM-Watch that the Instantaneous Reserve Plant Margin (IRPM) for the SA “Economic Island” was only 7% at this point in time.  Based on an earlier review we did of historical IRPM on a NEM-wide basis, we judged that a level of 7% is extremely rare, and significant, and hence have coded NEM-Watch (Gold and up) to change red when the IRPM drops that low – as shown.  A good visual indication that something is worth looking at!

7)  Yes, more opportunity to save on energy costs by large industrial energy users (through the use of curtailability).

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

1 Comment on "Tight supply-demand balance in SA today!"

  1. A quick PS – I missed this Market Notice that AEMO issued this morning, which explains the tightness of supply/demand.
    1) Taking one transmission line out of service reduced the transfer capacity into SA by half, hence exacerbating the shortfall.
    2) Note the alert level was actually LOR2 (i.e. more significant).

    See this notice in the list shown in NEM-Watch above (I just did not pick it up earlier!)


    From : AEMO
    To : NEMITWEB1
    Creation Date : 12/11/2009 07:03:49


    Notice ID : 28695
    Notice Type ID : RESERVE NOTICE
    Notice Type Description : LRC/LOR1/LOR2/LOR3
    Issue Date : 12/11/2009
    External Reference : Actual LOR2 South Australia Region – Thursday 12 November 2009


    Reason :


    Actual LOR2 South Australia Region – Thursday 12 November 2009
    Refer Market Notice ID 28684

    Due to the planned outage of the Heywood Moorabool No 1 500kV line in the Victoria Region, a credible contingent event may result in a separation of the South Australia region from the remainder of the NEM.

    Load may be shed automatically as a result of low frequency in the South Australia region.

    There are sufficient capacity reserves in the South Australia region but the technical characteristics of the capacity reserve generators may delay response to the contingency.

    LOR2 declared from 0655 hrs until further notice.

    Alan Honecker
    Power System Operations Manager


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