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 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.
Note about the NOUS Group report on the blackout in Victoria of 16th January 2007
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…
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,
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.
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.
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.
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.
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.