Note that this post is made with reference to events leading up to 13:00 NEM time (AEST) today – as I have typed this I have seen that what’s followed has been even more interesting (but that will have to be another post at a later date)…
The high temperatures that hit South Australia on Wednesday and spread to Victoria yesterday arrived in Sydney today and, as a result, prices have risen in NSW (with prices like a yo-yo in Queensland, Victoria and Tasmania as well), as shown in this snapshot from NEM-Watch at 13:00 NEM time today:
[note – five minutes later the price spiked further in NSW, and then further to $12,004/MWh at 13:10 – and this was when the excitement really started…]
It was of interest to us to see the yellow alert appear, in the snapshot above, colouring the relatively low Instantaneous Reserve Plant Margin (IRPM) in the NSW “Economic Island” indicating that local supplies of generation are feeling some stretch to meet the net demand levels in the local region – one of the driving factors behind the higher prices seen in NSW.
An “Economic Island” is formed when interconnector flows are running at limits, meaning that the “net demand” supplied by generators within that region (10,731MW in the snapshot above for NSW) is approaching the total available generation capacity in the region (12,318MW in the illustration above).
The difference between the two numbers (1,587MW) is the spare capacity available to meet that “net demand” – and represents the reserve plant margin (15%).
Typically, the lower the IRPM the higher the prices you’ll see, and a level of around 15% is a point below which you’ll start to see significant price outcomes – hence the alert colour coding.
Looking further into the detail with a snapshot from, the NSW region at 13:00 from ez2view version 6.1, we see that much of NSW’s available generation stock is running today:
Of particular interest is that Colongra has started today after an absence of many months, as shown in the trend of daily average output & availability for the station in NEM-Review:
The revenue the station has generated today will be a welcome boost to the NSW government’s recently commenced privatisation process for Delta Coastal – especially if the numbers quoted yesterday in the AFR are to be believed.
With the evidence of the past couple days, it promises to be an interesting summer….