At 20:30 on Tuesday 18th April 2017, the AEMO issued Market Notice 58400 noting that Administered Pricing had been declared for market ancillary services in South Australia, beginning 20:35 – as shown here via NEM-Watch:
We’ve fielded some calls about this pricing event and have prepared some of the following images below to answer direct questions – however we thought it would be of broader interest to our WattClarity readership, so have included here, as well.
My apologies, in advance, for any errors or omissions in the following – I’ve run over my budgeted time already so have to post this as-is… (I’m sure some of our more learned readers will be happy to point out these mistakes in comments below).
In the first image, I’ve wound NEM-watch back (in the “playback” function we first introduced in 2003) to show what the market conditions were for the 11:25 dispatch interval on Tuesday 18th April (so towards the end of the 11:30 Trading Period). For a start, we show the Energy Layer (the one most people focus on, 99% of the time):
As noted on the image, AEMO issued a Market Notice just prior to alert the market to a change in the underlying transmission network, that resulted in new Constraint Sets being invoked (as us if you want to know more about this) – which led to a significant reduction in the transfer capability on the Heywood link. Here’s the full text of that Market Notice:
As highlighted at the time, the Heywood link was effectively “hard-wired” such that it had to flow west. Because of the price difference (i.e. buying expensive in VIC to sell cheaper in SA) the flow was dispatched to be as low as it could be.
We then flip NEM-watch (still re-wound to 11:25 on Tuesday) to show the Raise Regulation FCAS Service (i.e. the one FCAS service, of 8 in total, where Administered Prices were declared), and we see a few other pieces of information:
For a start, we can see the Raise Reg Price for the 11:25 dispatch interval spike up to $14,000/MWh (i.e. the Market Price Cap that applies to each FCAS commodity, as well as to Energy), where it remained for many hours.
Powering up NEM-Review and panning back over the past 4 days, we see the summary of Energy and Raise/Lower FCAS prices in South Australia against a backdrop of aggregate local generation:
Finally, for those who really want to understand more, I’ve powered up ez2view and Time-Travelled back to 11:25 to look at the specifics of generator bids for Raise Regulation FCAS (narrowed down to just generators in South Australia). This is shown in the following snapshot:
As highlighted on the snapshot:
1) There are precious few generators that offer FCAS in South Australia – for this dispatch interval:
(a) There are a number of thermal plant in South Australia that are not offering FCAS services. Some never do, and are not equipped to do so.
(b) Despite the fact that it is technically a possibility, there are no wind farms in South Australia (or anywhere in the NEM) that offer FCAS Services. Not for this dispatch interval and not, currently, in any dispatch interval (though there is now a trial being organised for Hornsdale to “dip its toe” in the FCAS waters).
(c) There are (yet) no large-scale solar farms in South Australia. I’m not 100% clear on the possibility of solar PV farms providing FCAS – but it’s a moot point until the first one is built.
2) Given the dispatch patterns leading up to the network outage, hence constrained interconnector flow, the only outcome that could supply the necessary local services in South Australia resulted in Pelican Point setting the price with a bid up at the Market Price Cap.
Back in April, guest author Jonathon Dyson noted that “Ancillary Services Matter!” (the explanation in that post will help those who are unfamiliar) . The fact that we’re fielding calls now asking about occurrences in the FCAS market is some evidence that the broader energy sector is becoming aware of this fact.