A forced network outage on one of the major transmissions lines between Wallerawang and south Sydney on Sunday, and the need for a further network outage to facilitate repairs the following day, resulted in significant disruption to the market early in the week.
As a result of the outages there were step reductions of up to 1000MW on transfers into New South Wales and significant amounts of generation dispatched out of merit order. NEMMCO recalled the outage, while modifications to the constraints were made. A further period of high prices occurred in the afternoon in New South Wales and Queensland, with a further outage to continue the repairs.
Spot prices in New South Wales were above $5000/MWh for more than two hours on Monday, when network constraints designed to manage the outage, failed to maintain power flows on the network below secure levels. Spot prices peaked at $6724/MWh in New South Wales with five-minute prices driven to almost zero at times, in all other mainland regions.
These events saw almost $180 million added to the energy market turnover in New South Wales and Queensland and average prices for the week of $158/MWh and $44/MWh respectively.
Investigations into the main contributing factors which led to the prices above $5 000/MWh, as required by clause 3.13.7 of the rules, are continuing.
Average spot prices in Victoria and South Australia for the week were $35/MWh, up by more than a third from the previous week. Demand in Victoria approached 8 000 MW, the highest since January. The average spot price in Tasmania was $65/MWh, consistent with the previous week.
Turnover in the energy market for the mainland was $320 million. The total cost of ancillary services for the week was around $310 000 or 0.1 per cent of turnover. Turnover for the week in Tasmania was $11 million, while the cost of ancillary services was around $120 000 or 1 per cent of turnover.
Demand forecasts produced 4 and 12 hours ahead varied from actual by more than 5 per cent in approximately 20 per cent of all trading intervals across the market. These variations were most frequent in South Australia occurring in around two thirds of all trading intervals. Significant variations between forecast and actual prices occurred in 47, or 14 per cent, of trading intervals. Demand variations were the main contributor.
The AER would welcome comments on the information contained in, or the layout of, the report. Comments should be sent to Peter Adams or Mark Wilson, AER, GPO Box 922, Adelaide SA 5000 (email AERInquiry@aer.gov.au; fax (08) 8213 3414).
Figure 1 sets out national demand and spot prices in each region for each trading interval. Figure 2 compares the volume weighted average price with the averages for the previous week and the same quarter last year. Figure 3 compares the weekly price volatility index on the same basis.
Figure 1 National demand and spot price all regions
Figure 2 Volume weighted average spot price for energy market ($/MWh)
Maximum spot prices for the week were $3 153/MWh in Queensland, $6 724/MWh in New South Wales, $810/MWh in Victoria, $822/MWh in South Australia and $77/MWh in Tasmania.
There were five occasions in New South Wales where the spot price was greater than $5 000/MWh. These occurred between 10am and 11.30am and at 2pm and 2.30pm on Monday. Investigations into the main contributing factors which led to the prices above $5 000/MWh are continuing.
There were no low reserve conditions forecast for the week.
The total cost of ancillary services on the mainland for the week was around $310 000 or 0.1 per cent of the total turnover in the energy market. An unplanned network outage on Wednesday led to an increased requirement for lower contingency services. There was no significant impact on price.
Figure 4 Volume weighted average frequency control ancillary service prices (excluding Tasmania)
Raise
Lower
6 sec
60 sec
5 min
Reg
6 sec
60 sec
5 min
Reg
Last week($/MW)
1.41
0.7
1.14
1.13
0.26
0.31
1.74
2.29
Previous week ($/MW)
1.57
0.68
1.47
1.65
0.44
2.28
5.31
1.7
Last quarter ($/MW)
1.62
0.91
1
1.36
0.2
0.64
2.29
1.56
Market cost($1000s)
74
37
78
25
2
3
43
50
% of energy market
0.02%
0.01%
0.03%
0.01%
0%
0%
0.01%
0.02%
The total cost of ancillary services in Tasmania for the week was around $120 000 or 1 per cent of the total turnover in the energy market in Tasmania. At times on Tuesday and Thursday, despatch for raise and lower regulation was zero as a result of a failure of the SCADA system. The price for these services reached $10 000/MWh at the time. This had no impact on the cost of these services for the week.
Figure 5 Tasmanian volume weighted average frequency control ancillary service prices
Raise
Lower
6 sec
60 sec
5 min
Reg
6 sec
60 sec
5 min
Reg
Last week($/MW)
1.1
1.05
1.05
1.05
1.11
1.05
1.06
1.06
Previous week ($/MW)
3.42
1.05
1.05
1.05
4.76
1.05
1.1
2.63
Tasmania Market cost($1000s)
9
10
9
9
15
32
26
9
% Tasmania of energy market
0.08%
0.08%
0.08%
0.08%
0.13%
0.28%
0.23%
0.08%
Figure six 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 seven shows the weekly participation in each of the ancillary service markets on a regional basis.
Figure 7 Regional participation in ancillary services
Figures eight and nine 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.
