New record summer demand!
We watched with interest today as demand crept up in all mainland regions to the point where the NEM-Wide demand rose slightly above 33,000MW for the first time ever, during a summer period.
Seasonal Record of Events in the Market
Collections of events that we see happening in the NEM, categorised in terms of the seasons in which they occur.
Summer 2008-09 to date
Given that the holidays are now over (for most of us) and we’re returning back to “normal” life, we thought it would be a good time to provide a brief overview of what’s happened in terms of NEM-Wide demand, to date.
Analysis of the FCAS market in Victoria over the 23rd July, 2008
On the 23rd of July, 2008 one of the HWTS – LYPS 500kV Line was down for maintenance when a second one tripped, leaving only one line remaining. This caused NEMMCO to declare the failure of that remaining line the greatest single contingency in the NEM, causing them to buy large amounts of FCAS from generators.
Record summer demand in NSW yesterday!
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 hot day in SA yesterday, and prices soared!
Just as had been forecast, Tuesday 13th January 2009 saw hot, dry weather roll in across South Australia, and then into Victoria. The high temperatures caused demand to climb, but not to the level at which NEMMCO had forecast demand to climb over the summer period. As a result we saw the price in SA jump to a level near VOLL at 13:40, and remain there until about 18:00 (i.e. more than 4 hours).
A hot day in QLD today!
High temperatures in Queensland drive demand up on New Year’s Eve.
A review of recent summers in the NEM
A brief analysis of NEM-wide demand and IRPM during the summer months over the past 4 years.
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”
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.
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.
“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.
Cost of congestion to energy users
For the EUAA’s Members Meeting (held in Brisbane on 24th April 2008), our Managing Director was invited to provide of a précis of the presentation he previously provided at the “QLD Energy” conference (on 12th March 2008).
In particular, comments made by Paul with respect to the proposed upgrade to QNI – which was topical at the time of the conference, given that Powerlink and TransGrid had released their analysis of several upgrade options in the same week as the conference.
As a result of the presentation, Duncan Hughes wrote an article about the potential cost to energy users of the upgrade, and published this in the Australian Financial Review on 13th March 2008.
Given the magnitude of the numbers reported, this issue has proved to be of significant issue to large energy users – hence the invitation to present at the Member’s Meeting.
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%.
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).
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