Prices see-saw across the (mainland) NEM today

Sitting with some traders Wednesday (yesterday) afternoon, there was some interesting discussions about the extent to which the hot weather predicted for Victoria would drive demand higher and hence impact on prices.

The following image from ez2view, wound back using Time Travel to show a ST PASA demand forecast for Victoria made on Tuesday was illustrative:

A view of how AEMO was forecasting Thursday's Victorian demand to be, on Tuesday.

As can be seen, the demand forecast was for relatively high demand, but not as high as on 29th November (and certainly not near the all-time maximum from January 2009).

Hence, it was with interest that we watched prices jump up and down (across all four mainland regions) today.  The following are some snapshots from NEM-Watch:

7:25 and prices spike in South Australia

Our phones were buzzing with SMS alerts this morning before we’d even arrived in the office as the price spiked to close to the Market Price Cap as a result of transmission issues:

Price spike early this morning in South Australia

We can see in this display that flow over the Heywood interconnector was out of action, as a result of Power System Emergency Conditions that AEMO explained in this Market Notice:


13:00 and we see 150MW of Demand Response in Victoria

At 13:00 NEM time, we see the price spike to above $1000/MWh in Victoria:

Price spike in Victoria

As a result of this price spike, we see that demand in Victoria winds back for a few dispatch intervals:

Illustration of Demand Response in Victoria

Further information about the benefits of Demand Side Response have been provided previously.

14:25 and prices blip on the mainland

Throughout the afternoon we saw significant price movements in the mainland regions – such as shown in this snapshot from 14:25 where prices in all four mainland regions are in the “red zone”:

Low IRPM (Instantaneous Reserve Plant Margin) in South Australia

In this image, we can see how the “spare” capacity in South Australia available in this Dispatch Interval, at bid at any price, had dropped to just 278MW – meaning that the Instantaneous Reserve Plant Margin for the South Australian “Economic Island” in place for this dispatch interval (because of constrained flow on the interconnectors) dropped below 10%, turning the alert red.

14:35 and prices spike in Victoria

Ten minutes later, we see the Victorian price explode to be $12,899.90/MWh:

Prices spike in Victoria to the Market Price Cap

14:40 prices fall away

Five minutes later, we see prices fall away as a result of generation coming into the market, amongst other factors:

Prices fall away in all regions

14:45 demand peaks in Victoria (for the day)

Demand in Victoria peaked at 14:45 at 8,681MW just 5 minutes later (when measured on a Dispatch Target basis). The colour-coding in NEM-Watch highlights how this was only in the “yellow zone” compared with the all-time maximum set in January 2009.

15:35 and demand has dropped away as the cool change arrives

Only one hour later, and we see that demand in Victoria has dropped by about 1,000MW as the cool change arrives:

The cool change arrives and takes the heat out of electricity demand

Looks like an interesting summer ahead…

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.

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