winter

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.






Prices depressed in the NEM – 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 depressed prices experienced in winter 2008.


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.


NSW winter peak demand forecasts

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


“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 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.