High temperatures force demand high, NEM-Wide (and prices follow)
A few brief notes about a hot day across the mainland, with demand levels high in each of the 4 mainland regions
Victoria
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
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.
New record all-time NEM-wide demand (and for VIC and SA) today!
The day is not over yet, but we thought you would be interested in the attached snapshot highlighting the first of the occasions on the day when prices jumped to VOLL in SA and VIC as a result of searing temperatures stopping the tennis, and melting VIC and SA into new demand records for each region.
NEMMCO Report: Unplanned Outages of HWTS-LYPS line on 23 July 2008
On 13th November, NEMMCO released the final version of its report into the Power System Incident “Unplanned Outages of HWTS-LYPS line on 23 July 2008”
Links to external reports relating to the blackout
Following from the blackout, several government bodies, and industry organisations completed reviews of the events leading up to the blackout. For completeness, these reports (at least, those we are aware of) have been listed in this article.
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.
March 2008 – Massive Heat-Wave hits SA & Victoria
In March 2008 (after summer had officially ended) South Australians were forced to endure a record 15 straight days of temperatures climbing above 35ºC. Victorians also experienced extreme heat for a number of days. This sweltering weather forced demand through…
Second review of the blackout on Tuesday, 16th January 2007
Our second review was prepared in conjunction with the release of NEM-Watch version 7 (including the new NEM-Watch portal at www.NEM-Watch.info) in March 2007.
Weekly summary of events in Summer 2006-2007
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).
Our initial review of the blackout on Tuesday, 16th January 2007
Our first review, linked here, was prepared the night of the blackout itself, and provides a chronological history of events, as seen through the NEM-Watch™ application.
Nous Report, into blackout of 16th January 2007
Note about the NOUS Group report on the blackout in Victoria of 16th January 2007
16th January 2007 – Bushfires and Victoria’s blackout
Victoria experiences a large blackout in the afternoon and evening of 16 January 2007, when bush fires cause three main transmission lines to trip. This created chaos throughout much of Melbourne, and represented perhaps the most significant stress the NEM…
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,
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.
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.
23rd January 2006 – new record for peak NEM-Wide demand
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.
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.