Australia

  • Commercial and market outlook

    Recent events push NEM turnover to new heights

    The story of recent times in the NEM has been the significant escalation of wholesale price outcomes in the market. As discussed repeatedly, elevated fuel costs for gas and supply constraints in the market have sent NEM turnover to uncharted territory. By NEM turnover, we refer to the total costs...

  • Commercial and market outlook

    Big Battery, even bigger revenues

    The Victorian Big Battery (VBB) in Geelong, Victoria, is currently the largest commissioned battery in the NEM at 300 MW/450 MWh. In Q2 2022, VBB, and its owner Neoen, posted an estimated AEMO wholesale net revenue of just over $13 million for the three-month period. It is important to note...

  • Commercial and market outlook

    Elevated Wholesale Price in the NEM: QLD on the verge of triggering Administered Price Cap (APC) again

    The Administered Price Cap (APC) was triggered for the first state on 12 June at 6:55 am as a result of QLD breaching the Cumulative Price Threshold (CPT) of $1,359,100 for the rolling 7-day period. This caused the withdrawal of capacities by gas generators that could not recover fuel costs...

  • 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

    Australian gas prices have recently coupled with European spot. Will linkage persist post-2023?

    Last year it was difficult to imagine that spot gas prices in Australia would hit unprecedented levels of more than $40-50/GJ, with AEMO capping the DWGM price at $40/GJ. By comparison, the DWGM only averaged $5.10/GJ last year. As was mentioned by Energy Market Intelligence Manager Mohsin Ali in the...

  • 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...

  • Low carbon generation

    Electric Vehicles vs reactive power controllability of inverter-based resources

    Electric Vehicles (EVs) are quickly plugging into electricity distribution systems (EDS) around the world. Their take up introduces new challenges due to their random and high energy consumption. One of the important challenges associated with integrating EVs into EDS is voltage imbalance due to EV uptake in residential areas. This...

  • Power and gas networks

    Rate me

    The transmission network in the National Electricity Market (NEM) is protected from overloads in times of events or during normal operation by nominating thermal ratings on primary elements (such as transmission lines and transformers), against which the real-time electricity flows should not be larger. This limitation is important in the...

  • Commercial and market outlook

    Winter is coming: MT PASA scheduled coal outages for winter?

    The number of thermal generator problems continues to grow, and so does peak time volatility in the two northern states. On top of the closure of Unit 3 at Liddell occurring on 1 April and Unit 4 at Callide C still out without a public resolution, outages and problems have...

  • Energy storage and flexibility

    Hydrogen hype: How cheap the hydrogen from electrolysis can be?

    Hydrogen is considered a potential replacement for fossil fuels for energy generation, transport etc. Currently, 96% of hydrogen production originates from fossil fuels through steam reforming and coal gasifications. Only a small fraction (~4%) is produced via electrolysis. The high Capex of the electrolyser is usually referred to as the...

  • Home supply and services

    “The more [retailers] we come across, the more problems we see”

    Thirty-one retailers have gone bust since the start of 2021 in the UK. At least one of those entities has a subsidiary in the Australian market (having yet to acquire any customers, according to the most recent AER and ESC data). In this Chart of the week, we take a...

  • Commercial and market outlook

    Nobody said it was easy, but it’s time for us to part: VIC’s climate targets & coal

    In 2017, the Victorian Government legislated a state target of net-zero greenhouse gas emissions by 2050. Since then, short-term targets have been set in five-year increments, with the 2030 target being to cut emissions by 45-50% below 2005 levels. The Government is currently consulting on the 2035 target, which must...

  • Energy storage and flexibility

    Price spikes in Queensland: Is solar revenue affected?

    In the last few months, we have seen a substantial number of high price intervals in Queensland. Increased Market Demand on 9 March and the simultaneous trip of Gladstone units 3 and 4 on 31 March spiked energy prices to $8,800/MWh and $15,100/MWh levels, respectively. These price spikes occurred between...

  • 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...

  • Commercial and market outlook

    “I’m an All-Pro [coal plant]… You’ll never be more than a replacement player!”

    The retirement of Eraring has been the talk of the market since it was announced, but what are the actual implications of its retirement. How big a hole does it leave in the market, and what capacity is likely to fill the void? We take a quick look at some...

  • Commercial and market outlook

    Hogging the spotlight: the opportunity in the evening peak

    As the duck curve steepens and renewable energy penetration increases in the NEM, we briefly examine revenue share by time of day and highlight the growing opportunity in the evening peak. Will this become the new normal, with revenues increasingly concentrated in just one part of the day? Or will...

  • 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...

  • Commercial and market outlook

    Round and round it goes, where the loop flow stops, nobody knows

    A by-product of how market boundaries are defined, loop flows are phenomena in electricity markets that manifest as flows going in one direction across parts of a network loop and goes the opposite way in other parts of the same network loop. Regardless of whether the market design is nodal...

  • 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...

  • Commercial and market outlook

    Residues of negative pricing

    Building on the last two Charts of the week, the rise in the frequency of negative wholesale energy prices in the NEM has impacts beyond the price of electricity. In this Chart of the week, we take a closer look at the impact of negative pricing on Inter-Regional Settlement Residue...

  • Commercial and market outlook

    Duck, duck, goose: bigger bellies and longer necks

    The last few months have been littered with record low demand in the system, highlighting that the ducks of the NEM continue to arch their backs lower and lower.  In this Chart of the week, we zoom out on the changes to scheduled demand and in the variability of the lowest and...

  • Energy storage and flexibility

    How deep is your love? A look at the depth of negative prices in South Australia

    The recent rise in the frequency of negative wholesale energy prices in the NEM has captured the attention of many market observers. A less-discussed aspect is how deep these negative prices run. How much additional demand could be added to the system during the negative-priced dispatch intervals before the prices...