A tight supply/demand balance in NSW over the week (4th June to 8th June 2018) triggers various activity

Over the prior week (Monday 4th June to Friday 8th June 2018), the NSW region – and, to a lesser extent, the broader NEM – experienced a tight supply/demand balance.

In response to what was happening during the week, we saw a range of activity ourselves, including:

(1)  One-on-one questions with clients

Our prime focus is (and always has been) on continually enhancing how we serve our diverse and growing range of clients, who use our software (and other products) to help them understand what’s going on in the energy market.

Given that the events of that week were so complex (and coincidentally that I had pre-arranged commitments in NSW with a number of clients & others) it was not really a surprise that we fielded a number of questions (some described here) about what was going on.  We appreciate these questions – as they stretch our capability to understand, and explain clearly, complex events such as what happened last week.

(2)  On social media

On the evening of Thursday 7th June, I had a brief amount of time to post this snapshot of the NEM from NEM-Watch v10 on social media (LinkedIn, and Twitter) – which led to some discussions on social media, and elsewhere:

Over the weekend that followed, I was able to grab a few hours to take a more measured look at what had occurred through the week, as a result of which I could post the article “Recapping a shaky week for the supply-demand balance in the NSW region last week” on WattClarity on Monday 11th June.

(3)  In the traditional media

As a result of all of the above, and what we have done in the past, it was also not really a surprise to find ourselves referenced and quoted in the more traditional media over that week, and in the discussion that followed.  Here are some of the references we noted:

Saturday 9th June

As noted on the NEMwatch portal, we found our (RenewEconomy-sponsored) NEMwatch Live Supply & Demand widget referenced in the Newcastle Herald.

Journalist Andrew White from the Australian asked our CEO (Paul McArdle) a few questions before publishing an article on Saturday 9th June “Outages see power prices hit the roof” – including this paragraph:

The founder of Global-Roam consultancy Paul McArdle said only 6000MW of NSW coal ­capacity was available yesterday, which was an improvement on Thursday, but about 2000MW less than at the same time last week.
(though note that we’re a software company, not a consultancy)

Interested readers can see the chart (generated with our NEMreview v7 historical analysis tool) provided to Andrew on Friday 8th June here:

Mon 11th June

Drawing on the more detailed analysis published on Wattclarity on Monday morning, Andrew White from the Australian was able to publish an article on Monday 11th June “Paul McArdle of WattClarity: NSW power outages ‘threat to industry’” .

Tue 12th June

On Tuesday, Ben Potter from the AFR included some references to the WattClarity article in his article “Big power resists AEMO ‘strategic reserve’ push after NSW squeeze” .

Wed 13th June

After we’d both attended the launch of the Victorian Energy Policy Center in Melbourne on Wednesday 13th June, Ben Potter from the AFR also included reference to the WattClarity review of the prior week in his article “Energy expert to Tomago Aluminium: Buy cheap wind and solar power” .

 

 

 

This animation was prepared using our ez2view detailed market dashboard for the NEM and helps to identify some of the variety of factors that can generally be seen to interact to produce spot price volatility.

Following on from the significant piece of analysis we performed about the nature of volatility in the energy market (separately noted on WattClarity® in articles such as this one) we were tasked with speaking at All Energy in October 2013 to help our audience understand how renewable energy might integrate into the broader energy market in future years.

As part of this presentation, we provided this animated walk-through of one particular day in the Queensland region of the National Electricity Market (20th December 2012) which saw instances of price volatility:

This animation was prepared using our ez2view detailed market dashboard for the NEM and helps to identify some of the variety of factors that can generally be seen to interact to produce spot price volatility.

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:

http://www.mediavisionz.com/ea/2013/eaq/130530-eaq/index.htm

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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.

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.

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.”

2008-03-13-the-afr

Helping explain why Queensland power prices surged

In December 2007, wholesale electricity prices hit the maximum of $10,000 per megawatt hour for supplies into the national electricity grid from Queensland. Journalist, Nigel Wilson from The Australian sought insights from Global-Roam to explain the situation to his audience:

According to electricity industry monitor Global-Roam, the high Victorian demand resulted in the instantaneous reserve capacity margin in the NEM falling to 11.7 percent. While the margin has not dropped below 12 percent since the NEM was established in the 1990s, in June it dropped to about 7 percent on two successive evenings, meaning there was little spare capacity in the system.

With our CEO, Paul McArdle commenting on might have caused the price to surge:

Global-Roam’s Paul McArdle said the surge in demand this week might have been caused by the market being surprised by an earlier than expected peak in demand, with generators offline for maintenance to prepare for the anticipated peak of 33,000MW or so expected in January/February.

He noted also that lightning strikes in Queensland and South Australia on Friday meant NEMMCO downgraded transmission capacity from South Australia and from Queensland and reduced the flow into the NSW-Snowy-Vic transmission interconnector by about 700MW.

Mr McArdle said this made the shortage of generating capacity in Victoria more significant — and as a result, prices shot up until generators could respond.