Weekly summary of events in Summer 2006-2007

The following chart illustrates how the market demand grew steadily across the week,
finally breaking the 30,000MW mark on Thursday 11th January. Prices skyrocketed
as a result.

It can be also noted from this chart that:

1) Demand levels actually peaked in Victoria and South Australia a day earlier as a result of the hot weather pattern being experienced the day before in the southern regions (a small spike in prices can be seen in South Australia for the previous day);

2) The price spikes experienced on Thursday 11th were repeated on the following day, even though levels of demand were lower by about 1000MW across the NEM on the Friday.

3) It is important to note that, even at the time when these spikes were occurring on Thursday and Friday, the NEM still had almost 6,000MW of available surplus capacity, which represents more than adequate surplus reserve – see here:

Our more detailed analysis of the events of Thursday 11th January 2007 provides more detail of the way each participant reacted to the situation arose on that day.

This provides a good summary of what happened in the market during any week in which you were enjoying a well-earned break. Included in the report is:
1) Analysis of price and demand over the previous week;
2) Trend in interconnector flow, and price differential over the interconnector;
3) Generator dispatch and utilisation (in relation to their availability); and
4) Generator greenhouse gas emissions for the week.

As can be seen, there were a couple of the days during the week when demand spiked in Victoria and/or South Australia because of higher temperatures.

On Friday 8th December, prices spiked in South Australia (but not in any other region). Circumstances leading to this price spike are analysed on this linked review of the 8th December 2006.

a little before the start of summer

The following chart illustrates, at a macro-level, what was happening in the market during
the week:

As can be seen:
1) The whole of NEM demand level peaked at around 29,300MW on Tuesday 21st, but this was lower than the peak experienced in the previous summer; and
2) The NEM had a surplus of available generation capacity totalling more than 6,000MW at the time of peak demand (representing a Reserve Plant Margin of almost 21% for the market).
3) Despite this secure position, prices in many of the regions were seen to jump significantly on both Tuesday and Wednesday as peaking plant was called on to operate.

Circumstances leading to this price spike are analysed on this linked review
of Tuesday the 21st November 2006.