Weekly summary of events in Summer 2006-2007


The Week beginning Sunday 14th January 2007 On Tuesday 16th January 2007, Victoria experienced a large blackout when three main transmission lines were tripped due to bush fires. Get the full story in our report on the chaos that hit the market!
The Week beginning Sunday 7th January 2007 Industry began returning to work for this week.

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.

review of the week

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:

review of the week

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.

The Week beginning Sunday 31st December 2006 No analysis completed this week. As can be seen from the summary chart for peak daily demand, this was a quiet week in the market with low levels of demand (and low prices, as a result).
The Week beginning Sunday 24th December 2006 The NEM-Review “Week-to-Yesterday” report, such
as produced for this week, can be produced in minutes from within your copy of NEM-Review.

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.

The Week beginning Sunday 17th December 2006 No analysis completed this week
The Week beginning Sunday 10th December 2006 No report for this week.
The Week beginning Sunday 3rd December 2006 Note the trend below of demand and prices over the week:

review of 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.

The Week beginning Sunday 26th November 2006 No report for this week.
The Week beginning Sunday 19th November 2006

a little before the start of summer

Even before summer had officially started, temperatures had soared around the country at different points in time, and this had placed stresses on electricity supplies – as discussed in this article from the Sydney Morning Herald, concerning the power outages
experienced in Sydney on Tuesday 21st November 2006, with the city sweltering in 40 degree
heat.

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

review of 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
.

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

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