Yesterday afternoon at 2pm NEM time the price in QLD and NSW spiked. As you can see in this screenshot of NEM-Watch (click for a larger view), the Victoria to NSW interconnector was constrained to 386 MW, which was down from 1029 MW in the 1:55pm dispatch period.
This had the effect of driving prices in QLD and NSW up, while driving prices in SA and VIC down.
It is not certain, but at this stage it looks very likely that the cause of this sudden drop in flow across this interconnector was due to lightening strikes in northern Victoria. It is clear though that the drop in interconnector flow was not due to generator gaming – reserves in NSW and QLD dropped due to the change in the interconnector limit. At 1:42 pm (NEM time) the AEMO issued two reclassify contingency notices for northern Victoria – one for the simultaneous trip of Eildon to Mt Beauty No 1 and No 2 220kV lines and one for the simultaneous trip of Dederang to Glenrowan No 1 and No 3 220kV lines. The second of these market notices is displayed in the ez2view Australia screenshot below (market notices are also available in NEM-Watch):
These high prices were in effect from 14:00 NEM time to 14:15 NEM time. By the 14:20 dispatch the NEM had responded, the VNSW interconnector was unconstrained and prices returned to a moderate sub $40 figure. The interconnector limit north for VNSW was 653 MW in the 14:20 dispatch period. This price volatility ultimately affected the 14:00 trading price and the 14:30 trading price. Unfortunately for energy users in QLD and NSW the initial price spike occurred in the final dispatch period of the 14:00 trading period – giving them less opportunity to curtail their load in this trading period and driving the trading price up to $1 560.85 / MWh in NSW and $1 576.70 / MWh in QLD. The 14:30 trading period saw prices of $2 927.81 / MWh in NSW and $2 825.57 / MWh in QLD.