Analysis of the FCAS market in Victoria over the 23rd July, 2008


Introduction

On the 23rd of July, 2008 one of the HWTS – LYPS 500kV Line was down for maintenance when a second one tripped, leaving only one line remaining. This caused NEMMCO to declare the failure of that remaining line the greatest single contingency in the NEM, causing them to buy large amounts of FCAS from generators. An early report of this event is available here:

http://wattclarity.com.au/Public/Article.aspx?aid=34

This report investigates the effects of this on the FCAS market using new tools available in NEM-Review version 5.3 .

FCAS Analysis

From a historical perspective the 23rd of July had the greatest ever requirement for raise FCAS in Victoria, as seen in the graph below.

vic fcas since start of nem.JPG

Graphing FCAS in this way provides highlights significant events in the NEM. As can be seen the events of July 2008 caused a greater spike in raise FCAS requirements than the Victorian bushfires of January 2007 and other past events.

The following graph shows how dramatic the spike on the 23rd was when compared to the rest of July:

vic fcas over july 2008.JPG

The combined raise FCAS requirement in Victoria maxed out almost 1400 MW higher on the 23rd than on the 22nd or 24th. FCAS prices reached VOLL on this day when they had not exceeded $100 MW/h on any other day of the month.

vic fcas over july 23 2008.JPG

The high FCAS requirement effectively constrained supply in the NEM, forcing the pool price to VOLL in most regions. The events of this day illustrates how much the events of the FCAS market can affect the physical market.

vic fcas scatter over july 23 2008.JPG

FCAS prices on this day generally were a function of demand for FCAS.

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