Spot prices were aligned across the southern regions for most of the week with prices averaged $32/MWh in New South Wales, $33/MWh in Victoria and $38/MWh in South Australia. These prices represented an increase of around a third compared to the previous week. Peak demand in these regions was around 600MW higher than the previous week, contributing to the increased price. Rebidding, relatively close to despatch and in response to demand forecast errors, also contributed.
Spot prices in Queensland averaged $20/MWh, up slightly on the previous week. Flows into New South Wales continued to average around 850MW reflecting the high level of available capacity and mild conditions in Queensland.
In Tasmania the spot price averaged $149/MWh up by almost a fifth compared to the previous week. Lightning in the vicinity of the transmission network in the north of Tasmania on Wednesday evening, resulted in constraints, designed to ensure the safe operation of the power system, being invoked around 5pm.
As a result of these constraints, generation at a number of power stations was reduced by around 200MW. The 5-minute price increased to $10 000/MWh for three dispatch intervals just after 5pm followed by prices at $4000/MWh for the rest of the hour. The constraints were lifted around 7.30pm.
Just before 8pm, two transmission lines in the same area tripped as a result of the weather. Demand in Tasmania fell by around 400MW following the loss of some industrial load. Price again rose to $10 000 for one 5-minute despatch interval at 8pm. Generation at some power stations reduced immediately following the event. Investigations are continuing.
Turnover in the energy market rose to around $140 million, while the total cost of ancillary services for the week more than doubled to $1.6 million or 1.2 per cent of the total turnover in the energy market. Around $1.2million of that cost was the result of the events in Tasmania on Wednesday.
Demand forecasts produced four and 12 hours ahead varied from actual by more than five per cent in around 27 per cent of all trading intervals across the market with around half of all trading intervals in South Australia and Tasmania affected. Significant variations between forecast and actual prices occurred in 83 or a quarter of all trading intervals.
The analysis is provided for information only—it does not constitute business advice and should not be relied on as a substitute for obtaining detailed analysis or advice about the operation of the national electricity market. Neither the AER nor any of its employees make any representation or warranty as to the accuracy of the information in the analysis or its conclusions.
The AER would welcome comments on the information contained in, or the layout of, the report. Comments should be sent to Peter Adams or Mark Wilson, AER, 14th floor, 13 Grenfell Street, Adelaide SA 5001 (email peter.adams@aer.gov.au; mark.wilson@aer.gov.au; fax (08) 8213 3414).
Figure 1 sets out national demand and spot prices in each region for each trading interval. Figure 2 compares the volume weighted average price with the averages for the previous week and the same quarter last year. Figure 3 compares the weekly price volatility index on the same basis.
Figure 1 National demand and spot price all regions
Figure 2 Volume weighted average spot price for energy market ($/MWh)
Spot prices peaked at $6,411/MWh in Tasmania on Wednesday evening. This followed the reclassification of the network due to lightning. Maximum spot prices in New South Wales, Victoria and South Australia were around $300/MWh late in the week while in Queensland a maximum spot price of almost $100/MWh occurred on Monday.
There was one occasion in Tasmania where the spot price was greater than $5,000/MWh. This occurred at 5.30pm on Wednesday.
There were no low reserve conditions forecast throughout the week.
The total cost of ancillary services for the week more than doubled to $1.6 million or 1.2 per cent of the total turnover in the energy market. Around $1.2million of that cost was the result of the events in Tasmania on Wednesday.
Figure 4 Volume weighted average frequency control ancillary service prices (excluding Tasmania)
Raise
Lower
6 sec
60 sec
5 min
Reg
6 sec
60 sec
5 min
Reg
Last week($/MW)
1.09
0.75
0.92
1.49
0.16
0.15
1.18
1.43
Previous week ($/MW)
1.47
0.77
0.91
1.67
0.16
1.09
6.71
1.84
Last quarter ($/MW)
2.43
0.81
0.99
1.07
0.23
0.96
2.96
1.51
Market cost($1000s)
56
38
63
33
1
1
27
32
% of energy market
0.05%
0.03%
0.06%
0.03%
0%
0%
0.02%
0.03%
Figure 5 Tasmanian volume weighted average frequency control ancillary service prices
Raise
Lower
6 sec
60 sec
5 min
Reg
6 sec
60 sec
5 min
Reg
Last week($/MW)
126.84
1.05
2.2
4.53
2.72
1.05
1.05
2.57
Previous week ($/MW)
1.21
1.05
1.05
1.14
1.72
1.05
1.05
1.11
Tasmania Market cost($1000s)
1177
10
23
38
35
31
26
22
% Tasmania of energy market
3.89%
0.03%
0.08%
0.13%
0.11%
0.1%
0.08%
0.07%
Figure 6 shows the daily breakdown of price for each frequency control ancillary service. It also includes the cost of services sourced locally and in Tasmania.
Figure 6 Daily frequency control ancillary service prices
Figure 7 shows the weekly participation in each of the ancillary service markets on a regional basis.
Figure 7 Regional participation in ancillary services
Figures 8 and 9 show 30-minute prices for each of the ancillary services.
Figure 8 Prices for raise services
Figure 9 Prices for lower services
Figures 10 and 11 show the 30-minute Tasmanian price for each or the ancillary services.
Figure 10 Tasmanian prices for raise services
Figure 11 Tasmanian prices for lower services
Figures 12 and 13 present both the raise and lower requirements for each service over the week.
Figure 12 Raise requirements
Figure 13 Lower requirements
Figures 14 and 15 present both the raise and lower Tasmanian requirements for each service over the week.
