Prices across the market fell significantly compared to the previous two weeks–by more than half in Tasmania and by around 40 per cent across much of the mainland. Spot prices in Tasmania averaged $65/MWh for the week, compared to $170/MWh the previous week. Water levels in catchments have increased from as low as 20 per cent of full capacity in late July to around 30 per cent. This increase has seen a reduction in Hydro Tasmania’s offer price profile from 12 August, which combined with a reduction in demand, has led to significant reductions to the price. Despite this increase in water levels, storages are at the lowest for several years. The Tasmanian Government is currently considering a proposal for an additional 105MW of gas fired generation ahead of Basslink, which is due in April next year.
Prices averaged $30/MWh in South Australia, $26/MWh in Victoria and $24/MWh in New South Wales, a reduction of around 40 per cent from the previous week and consistent with a 6 per cent reduction in demand across the mainland. The price in Queensland averaged $20/MWh, down a quarter compared to the previous week.
Turnover in the energy market reduced to $100 million, while the total cost of ancillary services for the week was around $400,000 or 0.4 per cent of the total turnover in the energy market.
Demand forecasts produced 4 and 12 hours ahead varied from actual by more than 5 per cent in three-quarters of all trading intervals in South Australia. This compares with 22 per cent in Victoria, 20 per cent in Tasmania and 7 per cent in Queensland and New South Wales. Significant variations between forecast and actual prices occurred in 42 or thirteen per cent of all trading intervals.
The analysis is provided for information only—it does not constitute business advice and should not be relied on as a substitute for obtaining detailed analysis or advice about the operation of the national electricity market. Neither the AER nor any of its employees make any representation or warranty as to the accuracy of the information in the analysis or its conclusions.
The AER would welcome comments on the information contained in, or the layout of, the report. Comments should be sent to Peter Adams or Mark Wilson, AER, 14th floor, 13 Grenfell Street, Adelaide SA 5001 (email peter.adams@aer.gov.au; mark.wilson@aer.gov.au; fax (08) 8213 3414).
Figure 1 sets out national demand and spot prices in each region for each trading interval. Figure 2 compares the volume weighted average price with the averages for the previous week and the same quarter last year. Figure 3 compares the weekly price volatility index on the same basis.
Figure 1 National demand and spot price all regions
Figure 2 Volume weighted average spot price for energy market ($/MWh)
The maximum spot price in South Australia of $102/MWh occurred on Tuesday. In Queensland, New South Wales and Victoria spot prices peaked between $59/MWh and $88/MWh on Monday evening.
In Tasmania, the spot price reached $117/MWh on Wednesday. A change to Hydro Tasmania’s offer profile from 12 August saw an increase of 500MW or around half, in the capacity offered at prices of less than $75/MWh, the majority of which had previously been priced between $100/MWh and $150/MWh.
On Friday at 9.45am, a 5 minute price of $-1,000/MWh in Victoria and $ 161/MWh in South Australia occurred as a result of incorrect limit calculations for the Victoria to Snowy and Murraylink interconnectors. NEMMCO is investigating.
There were no low reserve conditions forecast throughout the week.
In Tasmania, the demand reached a maximum of 1,552MW at 8.30am on Wednesday morning. The spot price at the time was $72/MWh.
The total cost of ancillary services for the week was $393,000 or 0.4 per cent of the total turnover in the energy market. The cost of ancillary services in Tasmania remained at higher levels than the mainland at $160,000 or 1.2 per cent of the energy market turnover for the region.
Figure 4 Volume weighted average frequency control ancillary service prices (excluding Tasmania)
Raise
Lower
6 sec
60 sec
5 min
Reg
6 sec
60 sec
5 min
Reg
Last week($/MW)
1.14
0.56
0.88
1.21
0.15
0.17
1.03
1.55
Previous week ($/MW)
0.94
0.49
0.87
1.53
0.15
0.15
1.02
1.52
Last quarter ($/MW)
2.43
0.81
0.99
1.07
0.23
0.96
2.96
1.51
Market cost($1000s)
57
28
59
26
1
1
24
34
% of energy market
0.06%
0.03%
0.07%
0.03%
0%
0%
0.03%
0.04%
Figure 5 Tasmanian volume weighted average frequency control ancillary service prices
Raise
Lower
6 sec
60 sec
5 min
Reg
6 sec
60 sec
5 min
Reg
Last week($/MW)
1.43
1.05
1.06
1.22
3.81
1.08
1.05
1.09
Previous week ($/MW)
1.39
1.05
1.05
5.32
6.5
1.05
1.05
1.12
Tasmania Market cost($1000s)
14
11
12
10
48
32
26
9
% Tasmania of energy market
0.11%
0.08%
0.09%
0.08%
0.36%
0.24%
0.19%
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.
