Economic Island

The term ‘Economic Island’ was a term we coined many years ago for an earlier version of NEMwatch (and have used a number of times in prior articles on WattClarity), in describing what happens when interconnectors are constrained and hence:

1)   spot prices separate between adjoining regions  (i.e. by more than the dynamic inter-regional loss factor);

2)  which can be (at least in part) because local generators (i.e. in the constrained region) have local market power.


There are a number of articles written at times of Economic Islands, and some are tagged here.