From time to time there are particular topics that we develop a deeper interest in, sufficient to prepare analysis that goes well beyond a single article on WattClarity – or even a series of articles.
The growing chorus of mixed messages and concerns about generator performance is one such instance. It’s an area where we see Villain #4 active, meaning cost and risk for the NEM transition. As such, we are teaming up with several experts in different areas (including Greenview Strategic Consulting) to prepare an extensive Generator Report Card with data to 31st December 2018, for release early in 2019.
(A) Various concerns about generator performance
In recent months we have been compiling a listing of concerns voiced by various parties about different aspects of generator performance (some technical, some commercial, some environmental and so on). The following are some examples:
|Topic of Public Discussions
(some examples only, our list is much longer)
|Considerations about this topic|
|Concerns that existing thermal generators are becoming less reliable||On several instances in the past (such as this article on March 2015) we have flagged the concern that the changing mode of operation of thermal generation, and the changing economics of such, would lead to accelerated degradation of this fleet of assets.
More recently, there has been a growing chorus of people highlighting instances where coal-fired generators have tripped (and tagged them on Twitter as #coalfail).
Strictly speaking, power station trips are a normal part of operating any type of industrial process, as noted previously here – however we understand the essence of the concern. This concern was discussed in our article on March 2015.
It seems to us that what’s more important are questions such as:
|Claims that intermittent supplies are becoming increasingly constrained – or, in particular, constrained down.||Many WattClarity readers will know of the System Strength constraint that is reducing output of semi-scheduled wind and solar plant in South Australia.
There are also concerns about constraints on semi-scheduled output in other areas of the NEM, such as:
More recently we have seen some claims, and counter-claims, about the extent to which groups of wind/solar farms are being constrained down.
This might be measured a number of ways (e.g. % of time, or % of volume for starters), and we are interested to have an objective look.
|Awareness (sometimes perhaps belatedly) that Marginal Loss Factors can, and do, vary significantly over time.||We posted this article in July 2018 about how Marginal Loss Factors change over time – which is (apparently) something that has only been realized belatedly by a number of new entrant generation developers.
Given how centrally Marginal Loss Factors feature in the bidding, dispatch, and revenue processes (and also in the quantities of LGCs that are formally registered for renewable projects), it’s critically important that all generators understand these numbers.
We’ll provide you some easy-to-access history.
|Various concerns about the revenues being earned, and input costs being paid, by different types of generators.||Commercial returns drive many decisions being made in the NEM – both shorter term tactical decisions, and also longer term strategic decisions.
One central part of the Return Equation is the top line revenue being earned from production. Based on data that is publicly available, it is possible to approximately calculate spot revenues (though not contracted revenues). We are interested to see what trended revenue can tell us about the decisions being made:
The other central part of the Return Equation are the costs incurred in production. These are confidential to the individual participant (hence not directly considered in the price-based dispatch process, as noted here). However we are exploring what might be possible to infer, from generator bidding behaviour, about their cost structures. Of particular interest is how these costs are changing over time.
|Various perspectives, including some misconceptions, about bidding behaviour||It seems like generator bidding behaviour is never far from the general discourse about the operation of the National Electricity Market. The AEMC’s assessment of rebidding in the national electricity market released on 11th October 2018 was one trigger – which itself followed on from others.
Separately, we had also identified some particularly intriguing instances of rebidding and dispatch management at semi-scheduled plant that had raised more questions for us. On the other hand, we have also seen a number of new entrants taking a very passive role in the extent to which they (don’t) bid in the market – and we wonder what this might be costing them.
We’re interested to assess bidding and rebidding practices comprehensively in order to provide a contextual framework to assist this conversation moving forward by both:
|Questions relating to which generators have been involved in setting the price, and with what frequency||Coupled with questions about bidding behaviour (and perceptions of input costs) have been questions related to how often certain generators have been involved in setting the price.
Despite (or perhaps especially because of) the multi-dimensional nature* of the price setting process, we are particularly curious to investigate this one further.
In our experience, the price setting data published by AEMO (and hence made available in ez2view) for each dispatch interval is multi-dimensional:
Hence, we are lending some thought to what a correct answer might be in that respect.
We have a longer list than this – and we’d certainly be interested to hear from you if there are others you think we should be specifically aware of:
- please drop us a line using this feedback form, remembering to provide us a phone number we can reach you on if we have questions about your suggestions.
- or just give us a call on 07 3368 4064
(B) We’ve begun analysis across all power stations in the NEM
Given our position with respect to the Australian NEM, we are somewhat uniquely placed* to take a look at what the data is actually telling us in relation to the questions listed above, and the longer list of other questions we’ve not shared publicly here.
* what we mean by saying that “we are … uniquely placed” is that:
(a) we have collected and collated an extensive history to the NEM (in a large MMS database, including all the old predispatch runs + in a range of other data, such as being collated for our Generator Catalog);
(b) we are not a participant in the market, and are independent of any client or participant;
(c) we have a very broad/diverse client base, which provides us what might be a unique perspective in understanding the breadth of the questions being asked in different quarters about how the generation sector has been performing;
(d) we strive to remain technology agnostic (as noted before) – and instead are intensely interested in what insights real data can reveal about each and every power station, no matter what technology type.
(e) we are increasingly partnering with others who can complement our capability (such as for this Generator Report Card).
Hence, we have begun analysis that will lead into the compilation of an extensive Generator Report Card that will cover all power stations across the NEM, no matter what their fuel type or technology.
(C) We welcome your input, with your pre-order
We understand that the normal approach would be to wait until we’d completed the analysis and completed the report before offering our readers the opportunity to purchase a copy. The normal approach for clients would be to wait until the report was finished, in order to actually be able to see what you’re buying.
However there are a occasions when we don’t do “normal”.
We also recognize that there will be some of our readers who trust us enough that we will deliver some high quality insights in this process, and are keen to have an input into the specific questions and concerns we invest our energies into exploring over the next couple of months. We would very much welcome that input from those committed to the outcome – hence would welcome pre-orders at a low rate of only $900 exGST :
We won’t process your payment until we deliver this report. However sending in your pre-order now will provide you some additional benefits:
|Engagement in our analysis||First and foremost, we would welcome your views on what you would like to see as priority focus in this report.
We can’t promise that we will cover everything you suggest to us, nor that we will follow your suggested priority order – but we can guarantee that:
If you are not able to provide us a pre-order at this time but still have an interest in offering your suggestions of course you could do this here. However our priority will remain with those who have demonstrated a confidence in us to deliver by providing their pre-order of this Report Card.
|Earliest delivery||For those who pre-order the report, we will have a focused interest on delivering to you as soon as the report has been finalised (target early 2019).
Only after we have done this will we broaden our focus to also encompass those who might have decided to wait until the completion of the report.
|Cost saving||We’re not giving much thought, currently, to what the final price will be for the report. That’s something that we will do into 2019.
What we can say is that the price you pay to pre-order now ($900 ex GST) will certainly be the lowest you could pay for the report.
We’d welcome your pre-orders for the report now (this price will remain valid up until 31st December 2018 – but the purchase price of the report will change* into 2019).
* We don’t know, at this point, what the price in 2019 will be (and also the final price once released). We are clear, however, that the value the report will deliver (when we have investigated concerns such as those listed above) will be considerably more than the $900 early-bird pre-order rate.
The pre-order form can be downloaded from here – until 31st December 2018.
(D) What we currently know about the Generator Report Card 2018
With the analysis underway currently, we do not know precisely how the Report Card will look. These details will become clearer over the next couple months, as our analysis project continues.
What we do know are the following:
|Electronic PDF||We see the report being in electronic form – most likely in a PDF.
Because of the likely size of the report, it will be much too large to email to you, so we will set up a downloads site from which you can access the report when it is ready.
|Scope of use||The report will be yours to share across your organisation – no matter how large.|
|Various sections||We’re envisaging that the report will contain:
Because of this breadth of coverage, we envisage that the report will extend to hundreds of pages, which will make it necessary to include a separate Executive Summary with higher level insights included.
We envisage that this report will be useful to you for about 12-18 months after it has been delivered. At that point we might (depending on our other commitments, and customer demand) look to update it again.
(E) To keep track of the status
We envisage that we will sporadically update this particular page here to reflect the provide updates, as the report comes together.
Hence, check back here for updates as the report comes together…..