The Instantaneous Reserve Plant Margin (IRPM) was a metric we created with the release of NEMwatch v4 back in 2002.
We did this in order to be able to create a (non-price) real-time indicator of the the balance between supply and demand right across the NEM (which at that time included a Snowy Region, but excluded the Tasmanian region).
The IRPM was calculated as the Surplus Available Generation in the NEM divided by the Aggregate Demand across the NEM. Hence the smaller the percentage, the higher the price you’d expect to see (particularly under the “energy-only” market design).
Traditionally the Reserve Plant Margin was a metric used in electricity system planning, where installed generation capacity (i.e. maximum capacity) was used in the numerator, and anticipated peak demand was used in the denominator. Describing the Instantaneous Reserve Plant Margin on a similar basis delivered useful context.
With the release of NEMwatch v8 back in 2008, we extended the concept of IRPM into “Economic Islands” (which are described separately here):
In doing so, we helped to explain instances where regional prices might be high (due to transmission constraints), despite a large surplus of capacity more broadly.
Of most interest are these tagged periods where low IRPM existed.