NEM

  • Commercial and market outlook

    Casualties of the energy transition highway – market effects of Torrens Island B retirement

    As part of Australia’s energy transition, investments are being made to ensure sufficient network capacity to host renewable energy generation, share them between regions, and maintain power system security and reliability. One of the interconnectors being built is Project EnergyConnect (PEC), which will provide 800 MW of transfer capacity between...

  • Low carbon generation

    Lean, clean, electrolysing machines – how clean is Australia’s hydrogen future?

    The Clean Energy Regulator is currently exploring how to define ‘low-emissions’ hydrogen production through a Guarantee of Origin (GO) scheme for Australia. Such a scheme could set a threshold level for carbon emissions from the production process in order to classify it as being ‘clean’, similar to schemes in operation...

  • Energy storage and flexibility

    Christmas comes early for South Australian battery owners

    The choice of Chart of the week was an easy one following Saturday’s storms that ‘reined’ down on South Australia. The state became isolated from the rest of the National Electricity Market after one of ElectraNet’s pylons, supporting the interconnector between SA and Victoria, was knocked down[1].   The consequence...

  • Energy storage and flexibility

    State of Storage: Investigating battery profit for NEM states

    It has been an interesting year for Australian energy markets, facing unprecedentedly high energy prices, coal outages, and market suspension. In today’s Chart of the week, we will investigate the impact a BESS would have made during FY 2022. Using Cornwall Insight Australia’s battery simulation model, we simulated a stand-alone...

  • Low carbon generation

    Loy Yang A closure: How much VRE and firming capacity is required to cover peak hours?

    AGL has accelerated the closure of the Loy Yang A power station for the second time in 2022, a few days after the Victorian government announced a target of 2.6 GW storage by 2030, increasing to 6.3 GW storage by 2035. According to the AGL announcement, released on 29 September,...

  • Commercial and market outlook

    Boulevard of Broken Plants: Can NSW reserves handle non-Green Days?

    It’s been easy to get caught up in all the news from the Victoria and Queensland governments proposing record-setting funding and environmental targets by 2030 and 2035, along with the news of AGL bringing forward the closure of Loy Yang A. This signals that energy transition is now well and...

  • Commercial and market outlook

    EV uptake set to transform the grid in the Australia – but how much?

    Electric vehicles (EVs) are slowly becoming more popular in Australia, with new car sales increased during the last two years. Although Australia is behind in EV deployment compared to other countries, Federal and state governments have taken serious steps to accelerate EV uptake. Therefore, EVs could play a significant role...

  • 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...

  • Energy storage and flexibility

    “Each day looking for new ways to go on”: could a renewable capacity market assist hydrogen turbines?

    The rise of renewables has seen the need for additional firming capacity in order to smooth renewable output and replace coal capacity in the evening peak. The ESB and federal Ministers are currently in discussions regarding the development (or not) of a capacity market for the NEM. Interestingly from the...

  • Commercial and market outlook

    Do batteries add viability to electrolysers within the current market?

    Last month, the Australian Competition and Consumer Commission (ACCC) announced that there will be a gas shortfall in the east coast market in 2023, not a surprise considering the international gas crisis and high gas prices in Australia. Such events have increased attention towards expanding gas supply or reducing the...

  • 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...

  • 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

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    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...

  • 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...