AEMO

  • Energy storage and flexibility

    R1 and L1 revving up the BESS revenues

    In our ‘The VFF… Very Fast and Financially rewarding market so far’ Chart of the week, the two new contingency markets, the Very Fast raise contingency FCAS market and the Very Fast lower contingency FCAS, were analysed and demonstrated the high participation of big batteries along with VPPs and DERs....

  • Low carbon generation

    An investigation into REZ capacity factors during Victoria’s dark doldrums

    As the grid transitions to much higher levels of renewable penetration, the range of generation outcomes on any given day increases. The worst of these ranges are known as dark doldrums when there is a combination of poor conditions for wind and solar generation, usually a windless day in winter....

  • Commercial and market outlook

    The VFF… Very Fast and Financially rewarding market so far

    On 9 October 2023, 1pm (market time), we saw the start of two new contingency FCAS markets. The Very fast raise contingency FCAS market, and the Very fast lower contingency FCAS. Upon commencement of the VF FCAS market, a commissioning period of two weeks with an initial max requirement of...

  • Commercial and market outlook

    Is the sun setting on utility solar?

    The Federal Government has legislated emissions reductions of 43% below 2005 levels by 2030. Sourcing electricity from renewable technologies is fundamental to meeting this, with a much-publicised target of 82% renewables in the grid by 2030 – up from a current value of 38% over the last year. Fortunately, the...

  • Commercial and market outlook

    The Very Fast FCAS market is about to commence – a look at a possible time-of-day profile for R1

    On 9 October 2023, 1pm (market time), the dispatch of the new Very Fast (VF) FCAS market in the NEM will commence and will add two new markets for contingency FCAS, Raise 1 (R1) and Lower 1 (L1). AEMO has released a final industry go-live plan to keep track of...

  • Commercial and market outlook

    Polarisation of wholesale spot prices leads to opportunity for arbitrage services

    Over the last five financial years, South Australia has seen a significant increase in price volatility, with substantial portions of time both negative and above $250/MWh, leading to increasing opportunities for storage systems to provide arbitrage services. A number of events initiated the reduction in wholesale energy prices between $50/MWh...

  • Energy storage and flexibility

    Proposed changes to PFR and the impact on battery operations

    On 3 August, at the request of the Australian Energy Market Operator (AEMO), the Australian Energy Market Commission (AEMC) initiated a rule change request proposing to “clarify the mandatory primary frequency response (PFR) obligations of scheduled bidirectional plant (i.e. batteries with a capacity of 5MW and greater)”. One of the...

  • Commercial and market outlook

    VNI West selected path; an incentive for delaying coal retirements?

    On 29 May 2023, AEMO published a conclusions report on the VNI West Project. According to the report, option 5A (a variant of  AEMO’s preferred option in a previous consultation paper) is preferred for VNI West. In option 5A, the transmission line crosses the Murray River north of Kerang (Wamba...

  • Energy storage and flexibility

    A look at AEMO pre-dispatch forecasts over the last year

    The Energy Security Board (ESB), under the direction of the National Cabinet, is currently working on a number of changes that will impact how generators connect to and operate within the National Electricity Market (NEM). The Congestion Relief Market (CRM) model is one such change to how the NEM currently...

  • Energy storage and flexibility

    Delays to NEM connections and accurate forecasts

    AEMO is currently consulting on its methodology for reliability forecasting in the NEM, and among their proposed changes is an adjustment to the inclusion of projected new capacity. The existing assumptions are being examined due to two factors; Most new connections in the NEM assume that the time taken to...

  • Commercial and market outlook

    Moving with the times: How trading strategies in the NEM changed in a year

    Inherent in an electricity market like the NEM is its ever-changing landscape. Contributors to these changes may be government-driven policies, evolving market dynamics caused by external factors like a global pandemic, a worldwide rise in fuel prices, and even changes in the market structure itself. As cliché as it may...

  • Energy storage and flexibility

    Now we’re peaking with gas: how much evening NEM demand could be replaced with batteries?

    The events leading up to the recent market suspension in June have highlighted the role that peaking gas-fired generation plays in satisfying demand and setting prices across the NEM in the morning and evening peak periods. The team recently explored some of the drivers and effects of these events in...

  • Commercial and market outlook

    Off the charts: ESOO flags earlier reliability shortfalls but no need to panic yet

    In the space of a year, the prospect of reliability shortfalls in the NEM has increased significantly. This is the stark finding of AEMO’s latest Electricity Statement of Opportunities (ESOO) report. In our Chart of the week, we illustrate how reliability forecasts have deteriorated in just a year, and we...

  • Power and gas networks

    Losses or gains? What do transmission upgrades mean for Marginal Loss Factors

    AEMO’s 2022 Integrated System Plan has listed a group of committed and anticipated network projects, including VNI Minor, QNI Minor, and the Western Renewables Link (WRL). Besides relaxing network constraints, improving reliability, and unlocking generation capacities, transmission upgrades may also impact the Marginal Loss Factor (MLF) around the planned area....

  • Low carbon generation

    Analysing earlier coal retirement in Victoria: What does it take for more emission reduction?

    AEMO has recently published the 2022 Integrated System Plan (ISP), which provides an energy transition roadmap for the National Electricity Market (NEM). This ISP focuses on the “Step Change” scenario, which reflects strong action on climate change leading to a step change reduction of greenhouse gas emissions, based on the...

  • Commercial and market outlook

    Gas generation on the move

    Gas and electricity prices in Australia are unavoidably linked, particularly in the evening peaks where the gas generators have increased capability to set the price. Due to the recent spike in global gas prices, there has been a distinct change in gas generator bidding strategy resulting in an increase in...

  • E-mobility and low carbon

    Do network operators dream of electric vehicles?

    With more models entering the Australian car market and high prices at the bowser, electric vehicles (EVs) are garnering more attention from both cost-aware and environmentally conscious consumers alike. In this context, AEMO’s forecasts predict a not-too-distant future where EVs outnumber combustion-driven vehicles.  In fact, in AEMO’S 2022 Integrated System...

  • Commercial and market outlook

    Market suspension poised to lift, but underlying drivers may stick around

    It has been a chaotic few weeks on the east coast, culminating with the NEM being suspended on 15 June 2022, an outcome not seen in the modern version of the NEM. There has been much coverage of the key drivers of the crisis. It stems predominantly from a perfect...

  • Power and gas networks

    Australian gas markets spike to unprecedented levels

    Australia’s gas markets are in the middle of an unprecedented price spike. Current prices in the Victorian Declared Wholesale Gas Market (DWGM) have been tracking in the $20-40/GJ range since early May 2022, with prices hitting $50/GJ on 30 May. Prices in the other gas hubs of Sydney and Brisbane...

  • Power and gas networks

    Are you sure this is safe?

    On a real-time basis, AEMO communicates with the market through several channels, including market notices where they update everyone about the real-time state of the market and the facilities that support it. In this Chart of the week, we dive into some of the statistics around market notices to provide...

  • Low carbon generation

    Lower energy prices? More than just hot air

    The Victorian Government launched Australia’s first offshore wind targets as part of its transition towards a net-zero emission future. According to the target, 9GW of offshore wind will be installed by 2040, nearly quadrupling the total wind capacity in VIC. In this Chart of the week, we dive into the...

  • Commercial and market outlook

    State election day chills; SA hit $9,934/MWh on Saturday evening 19 March

    SA’s reliance on wind is getting to a point where there is not much to do except importing from VIC and generating with expensive fuel, such as diesel, when wind speed is not at its best shape. In this Chart of the week, we take a closer look at South...

  • Low carbon generation

    SA on cusp of 100% instantaneous renewables; gas unit directions remain

    AEMO’s goal of handling 100% instantaneous renewable penetration by 2025 is a significant challenge and fitting, given the pace the NEM is moving to support increasingly higher levels of instantaneous (and increasingly asynchronous) renewables regularly. While this challenge may not be as pressing for all NEM regions, the need to...

  • Commercial and market outlook

    Back to the Future P-IV: Are P5 Forecasts reliable?

    Is there a correct way to be one step ahead of your competitors? Do you want to be able to know the price before settlement accurately? The P5 Reports supposedly provide this… or do they? Many participants use this data to determine optimal outcomes for their fleets. Still, there is...

  • Energy storage and flexibility

    Fast Frequency Response (FFR) market: Is the NEM prepared for a new market?

    In July 2021, final rules were published to introduce two new market ancillary services – a very fast raise and very fast lower service. These markets would provide an FCAS contingency response faster than the existing 6-second market. The Fast Frequency Response (FFR) markets are set to commence on 9...

  • Energy storage and flexibility

    Seasonal frequency in the NEM: is VRE continuing to drive it?

    Frequency control remains a challenge for AEMO. New PFR (primary frequency response) provisions established in March 2020 will help AEMO to control frequency more efficiently. However, is it yet to be seen how market participants will be incentivised to participate in PFR market. In light of the rapid growth of...

  • Commercial and market outlook

    Is the NEM going off schedule?

    Is the NEM getting harder to control with rising variable renewable generation and distributed photovoltaic growth? AEMO’s balancing of scheduled supply is critical to ensure the system remains stable and wholesale prices work efficiently. This Chart of the week briefly examines if the NEM is “on schedule” to meet this...

  • Regulation and policy

    “Behind-the-Connection-Point” A match made in heaven?

    The AEMC's new rule change for storage integration into the NEM provides more flexibility for hybrid systems and VRE owners to more effectively level their bids and participation into the market. This means, if the new rule takes place, hybrids can manage their own internal energy exchange behind the connection...

  • Energy storage and flexibility

    Minimum demand projections in Victoria

    The surplus rooftop solar provides an enormous opportunity for additional flexible load, where this can be optimised during the day. Electric Vehicles acting at a distributed level (exactly where the surplus is arising) provide the perfect solution if utilised in conjunction with smart metering to assist in mitigating these issues....

  • Energy storage and flexibility

    Australian Chart of the week | Slip slidin’ away, You know the nearer your destination

    In our previous ‘Chart of the week’ back in November 2020 (Issue 61), we looked at the projected uptake of battery storage projects in the National Electricity Market (NEM). Nine months on, with a number of large projects announced, we felt it was worth an update. In our last chart,...