Pondering the future of Australia’s electricity market through detailed analysis

Our CEO, Paul McArdle recently penned an article on WattClarity pondering whether the remarkable price results from Q2 were a short lived excursion or whether they are the begging of a more systematic change in pricing patterns. Paul’s article caught the attention of several journalists including Ben Potter from the Australian Financial Review, who referenced the analysis in his piece ‘COAG out of action as electricity prices soar‘, and sought comments from Paul on the topic:

Average wholesale electricity prices across the National Electricity Market shot up to $65-$80 a megawatt hour in the mainland NEM states in the June quarter, and to $120 in Tasmania, Paul McArdle, director of GlobalRoam, said.

Paul McArdle weighs in on discussion about the cost of Basslink cable failure

Over the weekend, Angela Macdonald-Smith and Ben Potter from the Australian Financial Review wrote an article discussing the potential cost of the recent Basslink cable failure that has been plaguing Tasmania over recent months. In March, our CEO, Paul McArdle published some of his thoughts on the topic in a post to WattClarity, and he followed it up with a short update last week responding to claims about the total cost of the cable failure. Seeking in-depth insights and analysis on the matter, the journalists referenced Paul’s comments on the matter:

The highest previous estimate of the economic impact of the outage was a $400 million back-of-the-envelope estimate from Brisbane-based energy consultant and GlobalRoam director Paul McArdle, based on similar methodology of applying the increase in average prices to typical usage.

Providing analysis on the possible closure of Australian power station

Last week, Sydney Morning Herald journalist’s Adam Morton and Brian Morris published an article on the possible closure of coal-power generation at the Hazelwood Power Station. In the article, the journalists sought comments from a number of industry experts including our CEO, Paul McArdle. Providing experience and insight on the topic, Paul was quoted in the article:

Most analysts who spoke to Fairfax Media said it was difficult to say what impact removing Hazelwood would have on prices – Global-Roam’s Paul McArdle said it was the “million dollar question” – but many said they were likely to increase.

Paul McArdle, managing director at Global-Roam, said: “The reality is nobody knows because it depends what competitors do.” He said it was likely prices would rise while also lifting AGL’s profitability, for example.

WattClarity helps the Australian Financial Review explain Tasmanian situation

A recent article published by our CEO, Paul McArdle about the state of Tasmania’s electricity supply was quoted by journalist Ben Potter in yesterday’s edition of the Australian Financial Review. Ben Potter sought quotes from a number of experts in the industry to clarify what cost the current Tasmanian energy crisis may result in:

“Whatever the number, it’s big” said Paul McArdle, managing director of energy consultancy Global-Roam, in a blog post last month. Mr McArdle estimated the crisis would add about $216 milliion to Tasmania’s energy costs over the March quarter.

The estimate is based on average prices of about $!50MWh – about $100 above pre-crisis prices – and average consumption of 1000MW over the quarter.

What role might Demand Response play in a (possible) future grid featuring high levels of intermittency?

Last week Paul McArdle posted this article to WattClarity after speaking at All-Energy in early October. His presentation (with narration included) from the conference is available here:

Explaining South Australian wind generation to interested (and confused) stakeholders

After fielding a number of questions relating to wind farm production in South Australia over a two week period – our CEO, Paul McArdle took to WattClarity to help make the complexity of the situation understandable to many interested (and confused) onlookers.

To illustrate the yin and yang of wind over a 4-day period for broader consumption, we used our NEM-Watch entry-level dashboard. Using screenshots of NEM-Watch we were able to create the animation below to clearly explain what was happening over the 4-day period.

 

Providing insights about the state of solar-panel subsidies in Australia

In the summer of 2013-14, Geoff Winestock wrote an article for the Australian Financial Review regarding the state of solar-panel subsidies which became topical after a series of heatwaves in the southern parts of Australia. The article came after the AEMC issued a report stating that the cost of solar-panel subsidies will be a significant contributor to energy prices in the coming years. Our CEO, Paul McArdle was asked to provide insights on the topic:

 

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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.”

Explaining how a power upgrade delay may cost energy users billions

Our CEO, Paul McArdle has provided insights to Duncan Hughes from the Australian Financial Review in regards to how a power upgrade delay may cost energy users.

The article begins:

“DEFERRING until 2015 a $120 million upgrade of an electricity interconnector between Queensland and NSW will cost energy users about $5 billion in higher charges, major energy users say.

They claim an arcane formula – called the regulatory test – used to assess the merits of boosting the interconnector fails to take account for the real impact of the outcome on their costs.”

With the author quotes Paul commenting on the situation’s effects:

“Paul McArdle, managing director of market monitor NEM-Watch, said higher generating prices in summer peak periods would raise costs by $690 million a year, or about $5 billion for the next seven years.”

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