Author: Nick Clark

14 Feb Queensland Reaches Record Demand

Queensland (QLD) operational demand (see definition in image below) reached a new all-time record of 10,052 MW at 4.55pm yesterday (13th February 2019) largely as a result of temperature driven demand. Despite record demand, spot prices remained steady with QLD generators ramping up generation and conservative bidding from key generators. Image sourced from AEMO In terms of what type of generation was keeping the lights on, black coal and gas were the two largest contributing fuel sources (as shown in the image below). At the time of peak demand, 6,458 MW of generation was coming from coal and 2,253 MW from gas (natural gas and coal seam gas). Should demand have crept...

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25 Jan HIGH TEMPERATURES AND HIGH PRICES IN SOUTHERN STATES

Edge Energy Services recently published an article on the 16th of January outlining what happens in the market when high prices and a lack of reserves are published in pre-dispatch. On the 24th January, it was a different story, where extreme temperatures and high demand in South Australia (SA) lead to load shedding, activation of RERT and operation of the emergency generators in SA. This resulted in the maximum price reaching $14,500/MWh with an average of $3,388/MW. At the start of the week the Bureau of Meteorology forecast high temperatures across SA and Victoria (VIC) for the coming week. On the morning of the 23rd January, AEMO flagged extreme temperatures for SA...

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16 Jan High temperatures forecast for southern states

At the end of the last week, AEMO flagged the possibility of extreme temperatures for the following week in South Australia, Victoria and New South Wales. Weather forecasts were showing a large uncertainty in the predicted temperatures. Predictions ranged from mid to high 30s for Victoria, low to mid 40s for South Australia and high 30s for New South Wales. The key risk in these forecasts was the possibility of temperatures exceeding 40 degrees in two or more regions simultaneously. On 11 January, AEMO published a market notice highlighting the forecast extreme temperatures in South Australia and elevated temperatures in Victoria and New South Wales. In this notice, AEMO provided forecast temperatures...

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19 Dec Update from COAG Energy Council meeting

The COAG Energy Council met today for their 21st meeting. On the agenda was AEMO addressing their work in preparing the grid for summer, bringing down electricity costs and ensuring long term grid reliability and security. AEMO highlighted the priority of work being undertaken to ensure that there is enough dispatchable generation in the NEM and integration of renewable and distributed energy resources. The Ministers agreed to a work program for the ESB to develop advice on a long term, fit for purpose market framework to support reliability that could apply from the mid-2020s. There was very little detail on this framework, however Edge will look to discover more. Reliability Ministers agreed...

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23 Nov A lesson from RCR Tomlinson: corporate PPA’s and the sharing of risk

RCR Tomlinson entering voluntary administration this week has been a major eye-opener in the renewable energy world. The engineering firm had shown signs of stress earlier in the year, particularly when it was forced to record a $57 million write-down on the value of it’s Daydream and Hayman solar farms in Queensland. Following this, the company successfully went to market and raised an additional $100 million in capital. Now after incurring liquidated damages as a result of running late on solar projects, directors had no choice but to put the company into administration. In the renewable energy space, these events particularly emphasise the potential risk of entering into a PPA with...

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14 Nov STATE OF THE ELECTRICITY MARKET – WINTER MARKET OVERVIEW

The electricity spot prices were generally higher for the winter period (June to August) than the preceding three months. The largest contributing factors were higher gas prices and increased demand for most of the regions. This excludes Tasmania where average prices fell from $80.26/MWh in autumn to $47.55/MWh in winter. Demand was still higher in the Tasmanian region, however additional rain meant that many of the hydro plants were running, as opposed to spilling water without generating. This put downwards pressure on the local prices. The lower Tasmanian prices didn’t result in lower prices for the rest of the National Electricity Market (NEM). Across all regions, the prices during the 2018...

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14 Nov National Energy Guarantee: it’s over

In late 2017, the Energy Security Board (ESB) developed a scheme to provide investment certainty in the electricity market, which would address Australia’s commitments under the Paris Agreement. The Coalition had ruled out a carbon tax, other cap-and-trade schemes and virtually any other scheme which had been attempted in the past. This left very few options for the ESB to appropriately address investment certainty in the electricity market. The ESB eventually developed an innovative scheme called the National Energy Guarantee (NEG). The basis of the NEG was essentially a cap-and-trade scheme for environmental certificates and, as a sweetener, it also had a reliability obligation. Essentially, the scheme was linked to contracts...

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14 Nov Gas Market Update

Domestic gas prices have increased again as Queensland continues to export most domestic gas overseas in the form of Liquefied Natural Gas (LNG). Outages in early 2018 had limited output from the LNG facilities, however all trains are now available. The increase in total gas extracted on the East Coast of Australia is the largest contributor to the increase in gas prices. Before LNG demand, domestic gas could be extracted from cheap resources. However, as more gas is extracted from Roma, Queensland, the price of extraction has increased, which is then passed onto consumers. With the ability to sell gas overseas, producers are also looking to obtain a similar price domestically...

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11 Sep Victorian Renewable Energy Auction Scheme

The Victorian Renewable Energy Auction Scheme has come to a close and successfully underwritten six new renewable projects with a combined generation capacity of 928 MW. The target strike price in the contract has been known since the auction was announced in November 2018. These prices are: $56.52/MWh for wind $53.06/MWh for fixed plate solar $56.85/MWh for single axis tracking solar It is understood that prices achieved came in around the target prices. These are some of the most competitively priced agreements in the market. The VIC Government has committed to a 15 year CFD for each of the projects with a price floor of $0.00/MWh. The successful projects are: Berrybank wind...

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31 Aug CleanCo moving ahead

In a media statement released 30 August, the Queensland Government confirmed their intention to establish CleanCo, Queensland’s third publicly owned electricity generator. CleanCo will have a strategic portfolio of low and no emission power generations assets, and will build, own and operate new renewable generation. It is understood that CleanCo will take control of assets including Wivenhoe, Barron Gorge and Kareeya hydro power stations and the Swanbank E gas power station, courtesy of a restructure of the two current publicly-owned electricity generators – CS Energy and Stanwell Corporation. CleanCo is expected to be trading by mid-2019....

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