Sweating on the return of Loy Yang A Unit 2

As a short PS to yesterday’s article about high Queensland demand, I included a passing comment about these two market notices talking about AEMO’s Low Reserve Condition warnings issued via AEMO’s Market Notices on Monday for Wednesday afternoon/evening in the Victorian region:

Market Notice Content
Creation Date: 16/12/2019     12:52:01

Notice ID 71855

The Market Notice said:

AEMO declares a Forecast LOR2 condition under clause 4.8.4(b) of the National Electricity Rules for the Victoria region for the following period:

 From 1630 hrs to 1800 hrs on 18/12/2019.
The forecast capacity reserve requirement is 1,015 MW.
The minimum capacity reserve available is 936 MW.

 AEMO is seeking a market response.

 AEMO has not yet estimated the latest time it would need to intervene through an AEMO intervention event.

 Harmohan Singh
AEMO Operations

In particular, note that this alert was for an LOR2 condition

Creation Date :     16/12/2019     14:34:52

Notice ID               :         71856

This second Market Notice said:


AEMO declares a Forecast LOR1 condition under clause 4.8.4(b) of the National Electricity Rules for the Victoria region for the following periods:

From 1600 hrs to 1630 hrs 18/12/2019.
The forecast capacity reserve requirement is 1140 MW.
The minimum capacity reserve available is 1027 MW.

Danushka Sooriyadasa
AEMO Operations

In particular, note that this alert was for an LOR2 condition

These notices followed an earlier notice warning of high temperatures:

Market Notice Content
Creation Date :     16/12/2019     09:57:57

Notice ID               :         71854

The Market Notice said:


Refer to AEMO Electricity Market Notice No. 71778, 71813 and 71814.

 AEMO’s weather service provider has issued forecast temperatures for Queensland (QLD), New South Wales (NSW), Victoria (VIC) and South Australia (SA) regions that are equal to or greater than the Generation Capacity Reference Temperatures:

On 16/12/2019: Maximum forecast temperature 41 degrees C at Archerfield for the Brisbane area.

On 19/12/2019: Maximum forecast temperature 42 degrees C at Bankstown for the Sydney area.

On 20/12/2019: Maximum forecast temperature 43 degrees C at Melbourne for the Melbourne area.

On 18/12/2019: Maximum forecast temperature 43 degrees C at Adelaide for the Adelaide area.
On 19/12/2019: Maximum forecast temperature 43 degrees C at Adelaide for the Adelaide area.
On 20/12/2019: Maximum forecast temperature 45 degrees C at Adelaide for the Adelaide area.

 Also, note that elevated temperatures are forecast in some locations within the QLD, NSW, VIC and SA regions from 16/12/2019 to 22/12/2019.

 Further updates to this advice may not be provided.

 … <SNIP>


So the AEMO forecasts extreme temperatures for the Victorian region on Friday this week – and we explored in our Generator Report Card 2018  how extreme temperatures affect the capability of almost all infrastructure (including some that might surprise those who are not so closely involved).   Yet the Low Reserve Condition Notices published on Monday afternoon relate to two days earlier (Wednesday this week).

Promises to be an challenging week – and that’s just for Victoria!

(A)  In the media

There’s three articles in the media that I noticed that were of particular interest:

Article #1 = Late on Sunday 15th for Monday morning, Mark Ludlow wrote in the AFR about “’No room for anything to break’ this summer: AEMO – in this article Mark notes that:

AGL Energy’s chief financial officer Damien Nicks confirmed to investors late last week that the 2210-megawatt Loy Yang A will return to operation on a limited capacity on Monday and then crank up to full capacity within a few days.

… and:

AGL executive general manager Doug Jackson said repair teams had worked hard to get Loy Yang A back up to speed before Christmas.

“Work on the Loy Yang Unit 2 generator is expected to finish on the 16th of December. The unit will be ramped sequentially, synched by the 18th, reaching full load by the 19th,” Mr Jackson said.

… now it is worth noting that (assuming all went to this plan) we could not expect to see any output from the plant hit the grid until Wednesday 18th December (i.e. after the plant had synchronised with the grid).  So it was not a surprise to me that we did not see any output yesterday.

Later on Monday there were two follow-up articles that I noted:

Article #2 = on Monday afternoon, Sophie Vorrath wrote on RenewEconomy predicting “Loy Yang A unit returns, just in time for another blistering heat-wave noting that a return-to-service date was going to be on Thursday this week and including this statement:

In an emailed statement to RenewEconomy on Monday, AGL’s executive general manager of group operations, Doug Jackson, said some “final minor mechanical work” on the unit would be completed Wednesday, with generation set to begin on Thursday then progressively ramp up in load.

… so I noted a slightly later date in what’s been quoted from AGL between the two articles.  Not really a surprise, given the complexities of the repair process (and fingers crossed the return goes well).

Article #3 = at the end of the day on Monday, Angela Macdonald-Smith wrote in the AFR about “Victoria on a knife-edge as Loy Yang repair slips implying more directly a slippage in the implied return-to-service date:

AGL, which had originally expected to resume operations at Unit 2 at Loy Yang A on Monday, said it now expects the 560-megawatt unit to start generating on Thursday although it has completed the major part of the work.

… however I have some vague memory rattling around in my head that the AEMO had previously been talking about a 20th December operational date for Loy Yang A2 in any case (Allan’s note on 21st November references a prior AGL Investor presentation noting that Monday 16th December was when ‘major works (were) expected to be complete’ – so not much change from what we see this week?)


(B)  In the market data

A quick tour around some selective market data today (Tuesday morning 17th December) reveals a few things:

(B1)  The time horizon for the Low Reserve Condition has been extended

According to Market Notices issued earlier today, we’re currently looking at a longer period of Low Reserve Condition that forecast yesterday afternoon:

LOR 1 (Lack of Reserve Level 1) It is now looking (via Market Notice 71862, correcting 71860) that we’ll be at LOR1 (or LOR2, see below) from 15:00 through until 19:00 on Wednesday.
LOR 2 (Lack of Reserve Level 2) It’s now looking (via Market Notice 71861) like we’ll be at LOR2 level from 15:30 to 18:30 on Wednesday afternoon/evening (i.e. longer than forecast on Monday) – with the minimum capacity reserve available being 580MW (i.e. lower than forecast on Monday).

At 10:58:16 the AEMO issued a Generator Recall Notice (via Market Notice 71863) to cover the period 13:00 on Wednesday.

LOR 3 (Lack of Reserve Level 3) Not currently forecast

Worth remembering the various levels of severity in the Low Reserve Condition notices.

(B2)  The supply/demand gap is forecast to be larger on Wednesday than on Friday

Here’s a current trend of the supply and demand situation forecast for the Victorian region over the coming 7 days:


We can clearly see that the demand is forecast to be considerably higher on Wednesday and Friday than any other day over this two-week period.  It’s marginally higher on Friday, but we also see that the forecast available generation capacity is forecast to be higher on Friday as well – which would be one reason for the LOR2 forecast (currently) for Wednesday but not Friday.

Note that the “demand” measure shown in this trend is “Demand and Non-Scheduled Generation”.  Recall these gory details of the various different measures of such a seemingly simple concept of electricity demand.

Those readers with a licence to ez2view can access their own copy of this live trend here.

Using the ‘Forecast Convergence’ widget in the installed ez2view software and showing the same measure of demand, we can see that the forecast peak demand (on that measure) for Wednesday is more than 300MW lower than the (higher) peak in demand forecast for Wednesday on Saturday evening – however it is strengthening again (see prior discussion about some of the inherent challenges AEMO faces in forecasting demand):


(B3)  Capacity availability

The other side of the supply/demand equation is the available generation capacity, so flipping to view this in Forecast Convergence we see a lift in aggregate Available Generation capacity forecast for around 14:00 on Wednesday (i.e. just before the LOR1 condition starts) – and also around the same time on Friday afternoon:


Also flagged is a decrease in aggregate Available Generation forecast for the VIC region over the period from Wednesday afternoon through until Friday afternoon which is around 500MW in magnitude – which will have some guessing (as we currently can’t know*) that this might be due to a delay in AGL’s expected operational time for Loy Yang A2.

(B4)  Forecast Surplus (or Deficit in the case of Wednesday in Victoria)

Combining the two produces the AEMO’s view of the local surplus in the region – which is also seen in Forecast Convergence inside of ez2view:


So Wednesday is currently forecast to be in a ‘worse’ position than Friday.

(B5)  Watch first operations at Loy Yang A2

Those readers with a licence to ez2view can watch their own live trend that will show Loy Yang A2 output (along with the other 3 units) as soon as the it hits the AEMO’s Market Management System.

This same trend is also available for those with a licence to the more basic NEMreview trending functionality.


(C)  Making the market data better (from * above)

What’s going on this week is yet another reminder of how the market as a whole (by which I mean not just all the wholesale participants, but also all the others who are stakeholders in outcomes from what happens in the wholesale market – first and foremost being all the energy users) would be so much more better informed if they had visibility of what AGL Energy (and all the other generators) are submitting in their three-hourly updates to MT PASA generation availability forecasts.

This was something proposed by ERM Power to the AEMC in March 2019, and for which we expressed support  on 15th August and on 18th November.  We wrote about this type of thing in our Generator Report Card 2018:


Submissions close on Thursday 9th January 2020 at the AEMC on this one.

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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