Electricity Hunger Games downunder —  There’s a potential sighting of four hour price bonfire

It’s a grid on the edge

Solar Panels, resting on a river of subsidies. Photo.Like a meteor-shower, the dinner time performance today may or may not be a spectator event. The fun may start at 4:30pm in Qld, NSW, Vic, SA and Tasmania — a full quinfecta at $15,000 per MW/h. The first wave of winter cold is about to wash over the grid, and those solar panels will fail just as people plug in their heaters, ovens, dryers and kettles and there is a four hour spike at $15,000MWh forecast. The graph below is the forecast for NSW, but it is essentially the same tsunami shape and dimension in every single state of the National Energy Market. Right now I presume there are engineers in the control rooms sweating over alternatives and they may well pull it off. These wildly high spikes have a way of resolving at the last minute.  But think for a moment what kind of stakes we’re playing with. Hypothetically, if there was a 12,000MW demand for 4 hours in NSW at $15,000, that’s $720 million dollars worth of electricity. A few days like that would pay for a new coal plant, but no one seems to be listening to that price signal…

Even if they pull off aerial manouvers tomorrow and save millions of dollars (billions even) what’s clear is that the whole grid is flying seat-of-the-pants. The AEMO issued unprecedented warnings about a gas supply shortfall across Vic SA and Tas that have already been cancelled, but the reserves of generation are razor thin and winter has just begun.

AEMO Forecast Electricity prices for June 2. NEM. Graph.

It may not work out this exciting… but that four hour peak is worth millions. | AEMO

The total NEM wide demand expected is a bit over 30GW at peak. Not near the peak highs of summer which have hit 35.5GW on Jan 29th, 2009. Somehow in 13 years we’ve increased our network capacity by 25% but something isn’t working….

Yesterday the Instantaneous Reserve Plant Margin across the whole NEM fell below the 15% yellow alert trigger level.

Paul McArdle who lives and breathes the NEM market, says he can never remember seeing a warning like this before:

AEMO has a potential gas supply shortfall event for the VIC, SA, TAS regions for GD 02/06/22.

AEMO will convene a gas supply guarantee assessment conference with contacts that AEMO determines will be able to contribute or response to the potential gas supply shortfall to assess the event.

The event notice can be found here:  http://nemweb.com.au/Reports/Current/Gas_Supply_Guarantee/

It’s going to be an interesting winter.

 

 

 

 

 

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June 1, 2022 at 01:16PM

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