A very volatile couple of days in Queensland on Wednesday and Thursday this week, with respectively 12 and 20 dispatch interval (5 minute) prices exceeding $1,000/MWh, and average daily prices of $406/MWh and $781/MWh.
It’s not our intention in these occasional reviews to cover every high price event, nor drill as deeply into their detail as in a couple of earlier posts, and in general we saw continuation of the underlying themes of strong, weather driven demand and a thin bidstack (little generator volume offered in the broad price range $300 – $10,000+ per megawatt-hour). So here I’ll just focus on one overall observation about Queensland that’s been evident from the last couple of days.
The demand side vs the supply side
There were pretty clear signs on both days of demand response triggered by either actual or threatened dispatch price spikes, battling with supply side pressures for volatility.
On this chart for Wednesday, I’ve plotted actual metered demands versus dispatch price, and highlighted in red downward demand movements in excess of 100 MW in 5 minutes:
Other than later in the evening when demand naturally falls away rapidly, it’s clear that nearly all these demand falls happen immediately after or just before a price spike. Even that second fall (at 3:10pm) that doesn’t appear to be associated with a spike, actually is. Using ez2view’s Time Travel function to capture the market “pre-dispatch” outlook at 3:05pm:
– we can see that there was in fact a spike forecast at nearly $13,500/MWh within the current half hour trading interval. Almost certainly this outook led to price responsive load taking preemptive action by reducing demand as seen on the initial chart (such preemptive action makes sense because of the 5/30 issue discussed in an earlier post, as well as previously on WattClarity). This in turn was enough to prevent the spike actually occurring.
That same predispatch forecast also shows the potential for very high prices on the following day, and this is what we got:
The main differences here are what looks like a larger amount of demand response early in the day, and then its apparent absence during the main part of the afternoon peak in demand between 4pm and 6pm, including nine consecutive dispatch periods from 4:50pm where prices were at $12,499-$13,400/MWh.
The reasons for this aren’t clear, and as voluntary demand-side response is not scheduled by nor visible to AEMO in the same way as supply side offers and dispatch are, and therefore no detailed data becomes public during or after the event, we can’t do more than speculate. It’s possible that there actually was some load withdrawn right through this period. If so, this would have kept demand lower than it otherwise would have been, but clearly not by enough to stop prices breaking through to 5 digit levels once demands were solidly above the 9,000 MW level..