Presentation on “Extreme weather and volatile pricing in the electricity market” for Engineers Australia

The summer of 2012-2013 was a very volatile time for the Queensland region of the NEM.

Responding to a number of questions received from a number of our clients (and others) we initiated a more formal review of the nature of this volatility (including some of the underlying causes).

Our CEO (Paul McArdle) was invited to present some preliminary findings to a joint meeting of Engineers Australia and IEEE in Brisbane on 30th May 2013.

You can view the full presentation (including extensive Q&A session) by following the link below:

Presentation at the EUAA Queensland Energy Forum

On a number of occasions through summer 2012-13 we were called on by our clients (and others) to explain why prices were doing what they did in Queensland over that volatile summer.

Our CEO, Paul McArdle spoke at the EUAA Queensland Energy Forum in Brisbane as an experiment to see if it would help to convey the complexity of the interaction between different variables – we put together this movie replay of a 13 hour stretch on one of the early volatile days that featured a number, but not all, of the contributory factors. It’s not fully polished.

Customer uses ez2view to understand unforeseen transmission constraints in SA and VIC

Following a period of market volatility in the SA and VIC regions of the National Electricity Market, one of our clients noted to us the following:

“In recent days with volatility in SA and VIC driven by unforeseen constraints the ez2view tool has proven very useful. It’s an intuitive way to quickly get to grips with a new constraint and work out who/what is affected. I can confirm that it is the reference I use in these situations”

Matt Shanahan – Spot Trader, EnergyAustralia

14th of December 2012

It’s always nice to hear from our customers that what we strive so hard to build does deliver the benefits intended.

In particular we’re pleased to note that ez2view was particularly useful when the market stepped outside of ‘normal’ and threw up something a little different.  It’s those occasions when opportunities can really arise, and we like to help our clients make the most of them.

Customer uses “Power Supply Schematic” Market Map to see a clear picture of the structure of the electricity supply industry

Following a significant period of development work, we released updates to our popular Market Map™ wall charts late in 2011.

One of our happy customers let us know the following:

“I have received the Power Supply Schematic and it now take pride of place on my office wall. Please convey my congratulations to the whole team for an excellent portrayal of an extremely complex issue….”

Brian Green – Energy & Regulator Reporting Manager, Australian Paper


The electricity market is a complex place. For the people operating within the market it’s hard enough – let alone having to explain it to others.  Our Market Maps™ make that task much easier, as this client has testified.

Helping to explain winter peak demand, and price volatility, to a wider audience

Cold weather during June 2008 saw electricity consumption soar in the Queensland region of the National Electricity Market – delivering some spot price volatility.

Seeking some insights into what was happening in the market at the time, we fielded calls from journalist Duncan Hughes (of the AFR).  Our CEO (Paul McArdle) assisted by

In his article “Power prices put business on back foot” Duncan quotes Paul as explaining one of the causes:

“demand was growing at 100MW every five minutes, which … necessitated … NEMMCO to schedule more expensive (peaking) generation as a temporary measure to meet high anticipated growth rate in demand…”

Duncan also quoted Paul as noting how demand response was active in response to the price spikes.

Providing insights into massive demand’s impact on prices

Nigel Wilson from The Australian sought insights to explain ‘overheating’ electricity prices during the later part of summer in 2008. Nigel begins his article by stating:

“RECORD electricity demand in sweltering Victoria and South Australia yesterday pushed short-term prices close to the capped maximums, making a rise in wholesale and contract prices likely.”

And compiled insights from our CEO, Paul McArdle:

“Paul McArdle of electricity market monitor, Global-Roam, said the massive demand had had a big impact on prices.” going on to state “Global-Roam’s indicators show that by mid-afternoon there were substantial flows of electricity into Victoria from NSW, Tasmania and from Snowy Hydro.”

NEM-Watch used to explain peaking spot prices to a wider audience

Duncan Hughes from The Australian Financial Review has sought clarification using NEM-Watch to explain why the national electricity market was a “whisker short of a blackout” on a Tuesday night in June 2007.

Using a snapshot of NEM-Watch, Mr Hughes was able to illustrate how spot prices peaked:

According to NEM-Watch, a specialist software provider, a snapshot of the eastern seaboard and South Australia on Tuesday at 5:45pm, revealed spot prices paid by retailers hit more than $9400 MWH in Queensland, $9100 MWH in NSW, $7500 MWH in Victoria and more than $4500 MWH in South Australia.

NEM-Watch managing director Paul McArdle said at the peak of demand, national reserves were about 7 percent of capacity, or half of the typical back up of the national electricity market.

Providing insights to help explain why smart electricity meters are being encouraged

In his article in February 2006, Nigel Wilson from The Australian has quoted our CEO, Paul McArdle in his article “Smart new meters to cut power” in February 2006. Mr Wilson sought insights from Paul in relation to news that Australian household would be encouraged to use smart electricity meters to cut electricity bills and reduce pressure on governments to build new power stations:

Queensland company Global Roam, which monitors electricity generation, said last week total demand for electricity in Queensland and NSW was 21,079 megawatts, while total available generation was 20,090MW.
Managing director Paul McArdle said the only reason lights were not going out was that the Snowy hydroelectric scheme was generating at near capacity and sending all its production into NSW.

Journalist refers to Global-Roam to provide an explanation for supply shortage

Rod Myer from The Age has sought insights from Global-Roam to help explain the fragility of Australia’s power supplies after electricity prices in New South Wales and Queensland spiked to nearly the limit – $10,000 per megawatt hour. In his article, he refers to Global-Roam to explain the reason for the supply shortage:

Generation cuts in very hot conditions led to record demand levels for the second day in a row.

So dire was the situation in NSW that in mid-afternoon generation output, at just over 10,000 megawatts, was over 200 megawatts below demand.

The shortage appears to have been caused by plant failure and planned outages in NSW and Queensland. About 700 megawatts of production appeared to drop out in both states, according to information from power market software producer Global-Roam.