Tassie hits the Cumulative Price Threshold
For only the third occasion in the 10 1/2 years that the NEM has been operational, the Cumulative Price Threshold (CPT) has been reached. Yesterday evening, the CPT was reached in the Tasmanian region.
price volatility
November in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM – investigating the trends and significant events in the National Electricity Market during November.
September in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM. Here we examine the trends in price and demand across the NEM for September, and take a closer look at the effects of the 2007 drought on this particular month.
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.
January in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM. For January we revisit events such as the fires at Moomba in 2004 (which curtailed gas supplies from central Australia); and the blackout on 16th January 2007 which drove the price to VOLL in Victoria.
February in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM. February has seen multiple price spikes over the years often as a result of high demand caused by the summer heat, but also during times of surplus available generation capacity.
March in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM – covering notable events of March, such as the unforgettable South Australian heatwave of 2008 which caused the Cumulative Price to reach the Cumulative Price Threshold for the first time in our memory.
April in the NEM (a review of 10 years of history)
One of 12 articles on the months past in the NEM. Here we present a detailed analysis of prices in each region of the NEM, for the month of April over the past 10 years.
VOLL Pricing on 23rd July 2008
It appears that we spoke too soon when we mentioned on the 22nd July that winter 2008 had been relatively uneventful.
Just over 24 hours from making these comments, we saw prices jump sky-high in the mainland regions, and go the other way (to the negative price cap) in Tasmania.
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.
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.
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…
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.
7th December 2005 – high demand in Queensland and NSW
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
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.
26th January 2006 – high demand and price in Victoria and SA
There was a high level in demand in Victoria on Thursday 26th January 2006.
This was especially remarkable, considering that it was an Australia Day public holiday – when commercial (though not industrial or residential) demand could be expected to be somewhat lower than would otherwise be the case.
Coupled with this level of demand was a significant spike in price that lasted several hours.