NECA: The events of 26 November 2004 in South Australia

Our weekly report, covering the week to 27 November, highlighted the conditions in South Australia late in that week which saw temperatures above 35°C from Thursday onwards leading to high demands and an increase in average spot prices to $199/MWh. We noted that on Friday 26 November a rebid early in the day by International Power saw the availability of Pelican Point immediately reduced to zero. The reason given for the rebid was “Material change to market conditions”. Following this rebid, there were low reserves reported and the highest-ever price in South Australia of $9,000/MWh.

We have examined, in detail, the events of that day including:

• the actions of participants with respect to the code
• seeking further information from International Power, in accordance with clause 3.8.22(c)(3), regarding the rebid that saw Pelican Point shutdown and
• an assessment of the reserve situation.

It was noted that the Pelican Point plant was always available during the day to return to service, if required.

In light of this review, we are satisfied that the provisions of the code were met and that no further action is warranted.