Watt scarcity?
Guest author Allan O’Neil examines some recent episodes of price volatility (particularly 30th July to 5th August 2024) and whether they were driven by a shortage of supply, or other factors.
generator market power
Not-So-Quick review of price spike in South Australian region yesterday (Thu 19th Dec) evening
Took 2-3 times longer than planned (as there were a few different interesting observations that came out) but here is our initial – and perhaps only! – review of what happened in South Australia on Thursday 19th December 2019 (i.e. yesterday).
ACCC chief, Rod Sims, includes 6 factors driving retail electricity prices higher
A timely reminder from Rod Sims (at the ACCC) this week that there are a number of factors driving electricity price higher – not just a single “smoking gun”
A more forensic look at Queensland Price Volatility on Saturday 14th January 2017
An animated walk through 19 hours of Saturday 14th January 2017 in the Queensland region of the National Electricity Market – a day we dubbed “sizzling Saturday” not least because of extreme price volatility
Puzzling through three rule change requests
Some ideas that I have been puzzling over – about the overlaps and contradictions between 3 rule changes under consideration at the AEMC currently
1) The Demand Response Mechanism (better known as the Negawatt buyback mechanism)
2) The Bidding in Good Faith deliberation
3) The Requirement for Price-Responsive (large) Demand to bid into central dispatch
What happens if (when?) existing wind farms cross to “the Dark Side”?
A quick look at a price spike that occurred Monday evening (4th August) in South Australia
Is solar PV providing more opportunity for spot price engineering?
Some initial analysis looking into the question of whether the increased penetration of solar PV is increasing the variability of scheduled demand to the point that generators can exert more pressure on spot prices.
Updated animation of 20th December 2012 – a volatile day in the Queensland Region
An updated animation of 20th December 2012 focused on the Queensland region – a volatile day for that region.
Prices spike in South Australia today
Some quick notes about another price spike today in the South Australian region of Australia’s National Electricity Market
May in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM – in which we examine the trends in price and demand across the NEM for the month of May.
Our review of the heat wave in South Australia
With demand soaring, and interconnectors constrained, generators in South Australia and Victoria took what opportunity they had to force the price high. So successful were the South Australian generators that the Cumulative Price Threshold was reached in South Australia and, under NEM Rules, an Administered Price Cap was applied for a period of time.
Analysis of price volatility in the QLD region over summer 2007-08
Our Managing Director was asked to speak at the “Queensland Energy” conference in Brisbane on Wednesday 12th March – specifically addressing the topic of price volatility in the NEM.
To provide the basis of discussion during the conference, we focused our analysis solely on Queensland region (to make the topic more manageable).
In our review of volatility in the Queensland region, we focused specifically on 3 core attributes of the market: Queensland dispatch prices; NEM-Wide Instantaneous Reserve Plant Margin; and the concept of “Economic Islands”.
22nd and 23rd February 2008 – a rare hot spell in Queensland
In Queensland we experienced one of the mildest summers I can remember. As a result of this, demand levels were subdued for most of summer. However, for a couple of days in late February, summer finally arrived, and struck with a vengeance.
11th January 2007 – first spike in demand above 30,000MW
There was a temperature-driven spike in demand across the NEM later in the week beginning Sunday 7th January – culminating in the summer’s first demand peak above 30,000MW (on Thursday 11th January).
On this occasion, the spot price spiked above $1000/MWh in Queensland, NSW, Snowy and Victoria,
8th December 2006 – high demand in South Australia
There was a temperature-driven spike in demand in South Australia on Friday 8th December 2006.
However, demand also spiked on other days in the week, and on those occasions did not lead to the price spikes seen on the Friday.
21st November 2006 – demand spike in NSW
There was a temperature-driven spike in demand in NSW on Tuesday 21st November 2006.
These sweltering temperatures combined with bushfires to cause localised blackouts in the Sydney city area, as reported in the Sydney Morning Herald in the article “Power jitters as heat bites”.
Winter 2002 – Generator Market Power
From the start of the NEM through until 2001, the NEM was typified by a pricing dichotomy with sustained rock-bottom pricing in NSW, Snowy and Victoria and high and volatile pricing in the extremities (Queensland and South Australia).
In 2001, the QNI interconnection and many generation projects were developed. This led to the convergence of prices between all regions, and the disappearance of price volatility – circumstances that were a real threat to generator profitability.
In response, generators adopted an approach that came to be known as “the economic withholding of capacity” to engineer volatility into the market throughout winter 2002 – and hence higher prices as a result., and generator behaviour.
2nd February 2006 – price spike in NSW and Queensland
This week saw a new record demand in NSW of 13,292MW on Thursday 2nd February. Correspondingly, average prices were above $100/MWh in both NSW and Queensland – but the price spikes did not transfer to the southern regions.
24th February 2006 – price spikes in Victoria
Demand in Victoria peaked again, bringing with it high prices in Victoria and (to a lesser extent) South Australia.
Indeed, the demand experienced in Victoria (on Friday 24th February) exceeded the previous high level of 8,552MW for summer, set in January 2006.
Our analysis looked at generator behaviour on the occasions of these price spikes.
Weekly summary of events in Summer 2005-2006
Summer 2005-06 saw Australians sweltering in temperatures 40 degrees and above.
In the National Electricity Market, this led to new peaks in demand and (given the tight supply/demand balance) delivered high (and volatile) spot market pricing.
Here we have compiled a weekly summary of events in the NEM over summer 2005-06.