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!