Edge News

 

Our team is dedicated to being across the energy industry. We analyse any changes within the market and evaluate the impact to our clients. Here you will find a range of articles ranging from major industry events through to our detailed views on energy market movements.

 

27 Mar COVID-19 / NEM Impact Statement

COVID-19 has impacted us all in recent weeks. At Edge we have put plans in place that have allowed us to provide all services our clients require without disruption. We are working diligently to understand the impacts COVID-19 could have on the energy markets in the short and longer term. As more information comes to light, we will provide further updates on the impacts to the market and our clients. As we are only a few weeks into this pandemic we will try and provide an understanding of the impact COVID-19 could have on the market. Oxford economics, a team of 250 economists, has recently published a paper providing a high-level update on the impact of the pandemic on the world...

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26 Mar Oil cheaper than Coal!

We have all seen recently the impact that COVID-19 has had on global markets, in terms of stock prices, equity markets and of commodity markets. Exacerbating this was the poor timing of Saudi Arabia and Russia’s spat over oil prices and both choosing to disagree on production levels, the disagreement lead to Saudi Arabia choosing to flood the oil markets with supply inevitably driving oil prices down significantly, with the WTI Crude Oil index reaching its lowest point in the last 5 plus years or so, trading in the low to mid $USD 20/barrel, also impacting the Brent Crude Oil index, which fell to its lowest point in the last...

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04 Feb South Australia separated from the NEM!

The South Australian (SA) region has been separated from the remainder of the NEM regions due to the destruction of the main alternating-current (AC) interconnector between SA and Victoria (VIC). What occurred: On the 31st of January 2020 during wild storms that lashed eastern SA, western VIC, the 500kV main (AC) interconnection cable running through southwestern VIC was disconnected due to transmissions towers east of Heywood (Victoria) and west of Geelong (Victoria) collapsing in damaging storms and extremely strong winds.When this occurred, Interconnection flows quickly swung from exporting MW’s into VIC, to importing MW’s into SA.Alcoa’s Portland aluminium smelter tripped which only exacerbated the problem, A handful of wind farms were...

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31 Jan STATE OF THE ELECTRICITY MARKET – SPRING/SUMMER MARKET OVERVIEW

Electricity spot prices in Q419 (October to December) were softer than the prior two Q4’s in Calendar Year 2017 and 2018. Q419 prices continued to be relatively mild following on from Q319’s performance. We did start to see a little more volatility creep into the spot prices towards the end of the year mainly due the bushfire disaster around the NEM and also with heatwave conditions starting to form. Figure 1: Historical prices for Spring/Summer (Source: AEMO) Throughout October and November 2019, we saw milder temperatures and above average wind generation in both VIC and SA with the Bureau of Meteorology (BoM) indicating that a longer than expected Negative SAM (Southern Annular Mode)...

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28 Jan World Economic Forum – EU’s proposed carbon border Tax

The World Economic Forum was held late last week in Davos (Switzerland) with foreign leaders all around the globe coming together to talk about the global economy and hopefully generate some fruitful action. Probably one of the more market shifting proposed schemes put forward at the World Economic Forum was that of European Commission President, Ursula von der Leyen. Von der Leyen’s proposal is a daunting one from Australia’s point of view, as it could have a significant impact on the country’s vast economic dependence on exportation of minerals and goods. The proposed scheme, labelled the ‘carbon border adjustment mechanism,’ would be a tax applied to carbon-intensive good from those...

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20 Jan Water – a top priority for Tarong Power Station

Current weather conditions are placing an increased reliance on the diminishing water catchments across Australia. These water catchments store water for use by various parts of the local community including drinking water for residents, irrigation and Electricity generation. Stanwell recently announced water sustainability is a top priority for its Tarong Power stations located within the South Burnett region. Water is an essential necessity for thermal power stations to make electricity. The water is used for steam production and cooling. Tarong power station consisting of 4 X 350MW thermal units and a 443MW supercritical unit. These units obtain their water from two sources, the primary source is Lake Boondooma and secondary from a pipeline using water from Lake Wivenhoe or...

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13 Jan Retailer Reliability Obligation triggered in South Australia

The SA Government (South Australian Minister for Energy and Mining) has the power (under South Australian Legislation) to trigger a Retailer Reliability Obligation (RRO) upon informant from AEMO of a one-in-two year peak demand forecast shortfall event as published in the South Australian Gazette 17 December 2019, with the AER confirming and publishing the notice 9 January 2020. For the avoidance of doubt this means that unlike all other regions which require the Electricity Statement of Opportunity (ESOO) to predict an unserved energy event, SA can act independently without approval as such from the AER. The RRO was trigged for South Australia on the 9 January 2020 for the following periods: First...

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13 Jan Semi-scheduled and Intermittent Non-scheduled Generators urged to advise of De-ratings

A new market notice within the National Electricity Market (NEM) posted by the Australian Energy Market Operator (AEMO), one we have not see before was issued to all market participants on the 23/12/19. The market notice requested and served as a reminder for all semi-scheduled and intermittent non-scheduled generators to ensure they update their market availability bids, update their SCADA Local Limit or, if unavailable, advise AEMO control room to implement a quick constraint to the reduced available capacity level; and update intermittent generation availability in the EMMS Portal to reflect reduced plant availability as is required under the National Electricity Rules (NER), per NER 3.7B(b).limits. This was an interesting...

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23 Dec Gas power stations for Victoria and Queensland

The federal government recently announced an agreement to underwrite new gas turbines in Victoria and Queensland to provide relief from expected high peak prices. The operation of these assets, below the usual short run marginal cost of current open cycle gas turbines (QLD - $106 / MWh – AEMO 2019) will potentially limit the likelihood of high prices or price volatility over the morning and evening peaks resulting in reduced average spot outcomes. Under the new generation underwriting plan, which was proposed by the ACCC, the government will assure an amount of the electricity generated will be purchased for a set period into the future. The Victorian generator will be located at Dandenong,...

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13 Nov STATE OF THE ELECTRICITY MARKET – WINTER MARKET OVERVIEW

Electricity spot prices in Q319 (July to September) were relatively in line with Q3 2017 and 2018, however much higher than prices seen from 2014 to 2016 inclusive. Although, Q319 prices were softer than any other quarter for the year (2019) in majority of the NEM regions. The past three months have seen multiple negative price events in SA and QLD due to mild demand, constrained interconnectors and strong renewable generation volumes in solar (rooftop PV and large scale) and wind. SA’s Q319 price is on a downward trajectory from the massive jump-up it experienced in 2016, taking with it NSW and QLD which both had lower Q319’s in comparison to...

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