Tuesday 3rd November, and the temperatures that had driven prices higher in SA the previous day moved eastwards.
Whilst VIC demand was lower as everyone lost their shirts on a horse, demand climbed in NSW and QLD, dragging prices upwards as well.
NSW experienced a record summer demand on Thursday 15th January, driven by high temperatures across the state. The extreme weather experienced in NSW followed the extreme weather that swept across South Australia and Victoria only two days beforehand.
A Market Event Report has been published on the NEMMCO website discussing the market outcomes of the high energy prices in the New South Wales and Queensland regions on Friday, 31 October 2008.
It was with interest that we stumbled on this article in the Herald newspaper talking about what happened on the 31st October in NSW
A tight supply/demand balance in NSW on the 31st October, exacerbated by transmission constraints into the region led to sustained higher prices in NSW.
An illuminating view of the NEM during the high NSW prices on 31st October 2008, illustrated with screenshots and a dynamic video from the new NEM-Watch v8.
Our Managing Director spoke at the “Australian Energy & Utility Summit 08” in
Sydney on Tuesday 22nd July 2008, touching on a number of issues including the depressed prices experienced in winter 2008.
Our Managing Director spoke at the “Australian Energy & Utility Summit 08” in
Sydney on Tuesday 22nd July 2008, touching on a number of issues including the nature of peak demand forecasts (for winter in the NSW region) over the coming 10 years
We compiled a week-by-week summary of interesting events that occurred in the NEM – from 19th November 2006 through until 16th January 2007 (the day of the blackout).
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,
For several days in early December, temperatures reaching 40 degrees in Queensland and New South Wales cause airconditioning load (and hence total demand) to soar in both regions.
The high demands resulted in very high prices being experienced in both QLD and NSW (and also the SNOWY region). Both VIC and SA were insulated from the high prices because (at least in part) of the fact that transfers over the SNOVIC interconnector were constrained to minimise negative inter-regional surplus
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”.
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.
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.
Based on forecasts NEMMCO had been providing through their PASA process, we expected that it might prove that this week would deliver huge demand levels, and high prices.
Not to disappoint, the market did deliver high levels of demand in all regions:
(a) Peak demand levels were reduced somewhat from the huge levels the previous week in Victoria and South Australia;
(b) Demand levels were also still building to the record level to be experienced the following week in NSW;
(c) Peak demand levels in Queensland were fairly steady (and high) for most weeks of summer.
(d) In combination, a new NEM-wide peak demand target of 30,994MW was set on Monday 23rd January.
This article was written prior to 2nd February and drew from the insights gained with our NEMforecastTM product to highlight the looming issue of the tight supply/demand balance forecast for 2nd February 2006.