cotw

  • 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...

  • Low carbon generation

    “Ooh, a storm is threatening, My very [interconnection] today”: Can states utilise interconnection to share wind resources?

    Penetration of renewables continues to dominate the energy news, as we saw renewables as a proportion of total demand reach new heights this week to a new record of ~70% penetration. In light of this continuing march toward a renewable-dominated grid (building on some analysis we did in Chart of...

  • Energy storage and flexibility

    How long is the ‘Golden time of day’ for batteries?

    A key part of the business case for grid-scale standalone batteries is the arbitrage opportunity between low daytime wholesale prices (when renewable energy generation from solar is plentiful) and high evening prices (when the sun goes down and household demand ramps up quickly). The share of battery revenue coming from...

  • Low carbon generation

    MLF changes in NSW in the past decade

    MLF, short for Marginal Loss Factor, represents the portion of electricity losses that occur along the transmission network between a connection point and the Regional Reference Node (RRN). Within the NEM, the MLF serves as a metric to quantify these losses along the network, playing a pivotal role in determining...

  • Energy storage and flexibility

    Spread your wings and arbitrage away as Q2 sees ‘the spread’ increase

    The focus of batteries is constantly adjusting to reflect ‘where the money is at’. Various quarters have trends, and others have events that swing momentum. With FCAS enablement in Q2 this year dropping to some of the lowest values since 2016, shifting the solar curve, or rather arbitrage, became the...

  • Commercial and market outlook

    Zap, Crackle, Pop! SA’s shocking electric dance party on the 11th

    Across the mainland states in the NEM, South Australia (SA) relies heavily on variable renewable energy (VRE) resources. SA is an excellent subject to test the premise “What if the wind doesn’t blow, and the sun doesn’t shine”? Negative spot prices persist in South Australia due to an abundant supply...

  • 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...

  • Low carbon generation

    Putting the National in NEM

    The Australia-Asia power line proposed by Sun Cable will connect a 17-20GW capacity solar plant to Darwin with an 800km High Voltage Direct Current (HVDC) transmission line, which then connects to Singapore via a 4,500km HVDC transmission subsea cable (Australia-Asia-powerlink). Expected to be operational by 2027, the $35 billion project has...

  • Commercial and market outlook

    The Knights who say FI: FI growing despite forecast systems popularity

    Although not quite as thrilling for some as the search for the Holy Grail, finding a way to minimise causer pays costs continues to take the focus of both wind and solar farms. Using the FI value through self-forecast systems[1] has become increasingly prevalent for these assets in an effort...

  • Commercial and market outlook

    How much Raise FCAS is needed as inertia reduces?

    The Step Change scenario in the 2022 Integrated System Plan (ISP) is targeting 83% renewable energy generation in the NEM by 2030-31. By then, around 79GW of VRE resources (wind, utility solar, and distributed PV) is expected to have been installed to help replace the 14GW capacity of synchronous generation...

  • Energy storage and flexibility

    How much ‘annuity’ do you need under LTESA?

    The NSW Electricity Infrastructure Roadmap’s second competitive tender round for firming infrastructure commenced on 3 April 2023. This second round is focused on supporting LTESA firming supply proponents, where ‘the LTES Operator will have the option to access a capped annuity payment as a top-up to the operating revenues of...

  • Commercial and market outlook

    ESB’s prototype; what can it tell us about the Transmission Access Reform?

    In May 2023, the Energy Security Board (ESB) published a consultation paper addressing transmission congestion. The paper proposed a voluntary congestion relief market (CRM) and a priority access mechanism. The priority access mechanism tends to incentivise generators to sit in non-congested areas to avoid further congestion. The CRM model also...

  • Low carbon generation

    “If I don’t get some shelter, ooh yeah, I’m gonna fade away”: How much firming is needed for wind?

    In the last week, renewable generation in SA has varied from 126% of local demand to only 0.6%. During this period of low wind in the state, SA was importing ~600MW from Victoria. At that same time, renewables were thankfully generating 34% in VIC, along with brown coal pretty much...

  • Commercial and market outlook

    Two more retailers bite the dust

    The announcement on Friday that QEnergy and Mojo Power will no longer provide retail services illustrates the battering Australian electricity retailers have faced over the last year. High hedging costs, especially for non-vertically integrated retailers, have seen smaller retailers hit the wall, such as Elysian Energy, Enova Energy, and Power...

  • Power and gas networks

    Trouble Ahead? – What’s Next For TNUoS Charges?

    Some industry participants will be well versed in the Transmission Network Use of System (TNUoS) charging regime, while others may not have had to engage with it before. Regardless of previous involvement, these charges are becoming increasingly important to understand for reasons we will discuss shortly.  In this week’s ‘Chart...

  • Home supply and services

    Domestic Suppliers Smart Meter Targets Updated For 2023 

    As part of its Mid-Year Review, the government is consulting on the Smart Meter Targets Framework for Year 3 (2024) and Year 4 (2025) of the revised smart meter rollout, setting out energy supplier annual smart meter installation targets on a trajectory to 100% coverage by the end of 2025....

  • Energy storage and flexibility

    Navigating the Changing Landscape of Balancing Services Pricing Developments

    From an energy market perspective, 2022 was an especially interesting year as geopolitical events pushed Europe’s energy sector out of the status-quo and into uncertain and uncharted territory. While most of the attention remained focused on developments within the wholesale sphere, interesting developments arose within the balancing services space too....

  • Business supply and services

    Average gas and power prices for SMEs declined sharply in February

    From late 2021, small and medium enterprises (SMEs) looking to secure a fixed energy contract would have seen steep increases in their energy bills, driven primarily by price volatility in the wholesale energy markets. In this week’s 'Chart of the week', we discuss the changes in prices for SMEs up...

  • E-mobility and low carbon

    Taking charge: are they ready? Local authority charging infrastructure plans

    Electric vehicle (EV) uptake and public charge point installs have increased rapidly over the last few years, but to support the next wave of EV drivers, the public charging network needs to be improved. Government has outlined the leading role it expects from local authorities (LAs) in planning and delivering...

  • Commercial and market outlook

    Prices soar in the west

    For the first time in the history of the Western Australian Wholesale Electricity Market (WEM), the balancing price reached the maximum price limit of $1,018/MWh between 5:30pm and 7:30pm on Tuesday, 29 November 2022. This came one month after the state-owned Muja C Unit 5 coal power station was closed....

  • Energy storage and flexibility

    Out with the old, in with the new: T-4 Capacity Market clears at record price

    On 21 February, the T-4 Capacity Market auction for Delivery Year 2026-27 cleared at a record high price of £63.00/kW/year, procuring 43,000.955MW of capacity. In this week’s 'Chart of the week', we explore the key takeaways from the auction.

  • Energy storage and flexibility

    A pebble in the water makes a ripple effect…

    At demand levels averaging only ~200-700MW, FCAS markets are dwarfed by the ~20,000MW energy demand in the NEM. Nonetheless, with 8 different markets to participate in, the potential value that participating in FCAS can add to a participant's revenue should not be underestimated. In this Chart of the week, we...

  • Power and gas networks

    Push to meet renewables targets intensifies charging differences in GB

    Higher transmission costs for generators in Scotland have been a feature of the GB electricity market since the introduction of cost reflective pricing, but with the ambition to increase generation levels from offshore and onshore wind and meet Net Zero generation targets, this is likely to increase. In this week’s...

  • 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...

  • Business supply and services

    Supplier of Last Resort true-ups confirmed by Ofgem

    Ofgem has published its decision documents confirming the Supplier of Last Resort (SoLR) true-up claims submitted by energy suppliers and the amounts it has agreed as part of their SoLR levy claim. In this week’s 'Chart of the week', we review the SoLR true-up claims.