Electricity

08 Mar AEMO releases draft Marginal Loss Factors

The Australian Energy Market Operator (AEMO) released its draft marginal loss factors (MLFs) today. As generally expected, solar and wind farms that are a long distance from the regional reference point have been hurt. The most notable example of this is the Broken Hill solar farm, which has a draft MLF for FY20 of 0.7254. This is 0.2535 below the current MLF. If the draft MLF is confirmed in the final report (due 1 April 2019), this will reduce the volume of electricity sold by the solar farm by 25%. A number of other solar and wind farms had material reductions in MLF and are facing a challenging situation. Most...

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01 Mar CleanCo Moving Ahead – Part 2

With expectations that CleanCo will be trading in the NEM by mid this year, things are getting into full swing. Last week CleanCo appointed its first two key executives – Miles George and Geoff Dutaillis. Who are these new executives? Miles George has been appointed the Interim Chief Executive Officer (CEO) at CleanCo. His role at CleanCo is to secure cleaner, more affordable, sustainable energy and secure supply of electricity for Queensland (QLD). He was previously the CEO and Managing Director of Infigen Energy. After leaving Infigen Energy in 2016, Miles continued as a strategic adviser until December 2017. During and after his time at Infigen, Miles has been the Chairman of...

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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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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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