low instantaneous reserve plant margin

Prices Surge in QLD and NSW as Demand Climbs

We noted yesterday (Wednesday 10th June) that NEM-wide demand climbed past 32,000MW for the first time this winter.

The following evening saw demand climb to similar levels (a peak of 32,054MW at 18:20 – so 35MW higher than the previous night). However the situation on Thursday night was different in two key ways…

Massive Demand, Huge Prices, Load Shedding and the Cumulative Price Threshold (and lessons learnt?)

Wednesday 28th January saw demand across the NEM jump to unprecedented levels, setting a new record of 34,843MW at 16:00 NEM time. On Thursday 29th January, we saw the demand increase still further, leading to prices that stayed high for much of the day (to the point where the Cumulative Price Threshold was reached in VIC and SA and price caps were imposed), and a relatively small amount of involuntary load shedding occurring in VIC and SA.

June in the NEM (a review of 10 years of history)

One of 12 articles on the months past in the NEM. June has brought us several cases of “economic witholding of capacity” – particularly in 2002, and in 2007 the NEM had a very interesting week in which the IRPM plunged to its lowest level ever.

Volatility in the market over winter 2007

Our Managing Director spoke at the “Australian Energy & Utility Summit 08” in Sydney on Tuesday 22nd July 2008, touching on issues including the extremes of price volatility that were experienced over winter 2007.

“Power Prices Jump in Eye of the Storm”, from the AFR

Following from an alert to the situation provided by NEM-Watch, Duncan Hughes published an article “Power Price Jump in Eye of the Storm” that mentioned the extremely low levels of NEM-Wide Instantaneous Reserve Plant Margin (IRPM) that had occurred for a 60-minute period over both days.

Background information to the shortage of capacity in winter 2007

Following from the interest generated in the article published in the AFR, we completed some analysis of the trend in IRPM over the history of the NEM up until June 2007.

The results of this analysis revealed that at no time before 2007 had the IRPM even dropped below 12% and that, except for the 2-day period (19th and 20th June) the IRPM had not dropped below 10%.

Winter 2007 – NEM-wide shortage of capacity

For two remarkable winter evenings in 2007 (19th and 20th June specifically) NEM-Wide Instantaneous Reserve Plant Margin (IRPM) plunged to the lowest levels ever seen in the NEM (a mere 7.6%) as generators were caught short of capacity by a…