Analysis

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Closure notice rules not as simple as they sound

Last week, the Federal Energy Minister submitted a rule change to the AEMC to extend the notice of closure for generators to five years. Early market information is certainly beneficial, but attempting to mandate fixed dates does introduce complexities, is not readily enforceable and is potentially counter-productive. It also appears to confuse forecasts and commitments. We take a look at the history of such rules, along with the issues that can arise.

BY Ben Skinner Apr 14 2022

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Do generators earn adequate revenue?

Electricity markets are always evolving to address new and emerging issues. The Wholesale Electricity Market (WEM) has seen its share of reforms and changes. Together they can have a substantial impact on generators, so to better understand the implications the Australian Energy Council (AEC) engaged Marsden Jacobs Associates (MJA). MJA’s review is pertinent across Australia and here we look at the key findings and consider whether generators in the WEM receive adequate revenue to support the dramatic transition underway.

BY Graham Pearson Apr 07 2022

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Year in review: Some hits, some misses

It was another year of significant developments in the energy sector ranging from carbon emission commitments from both the Federal Government and Opposition, to the start of 5 minute settlements and Victoria's new tougher requirements for retailers.

BY Carl Kitchen Dec 09 2021

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Five-minute settlement starts

A momentous change in the National Electricity Market occurs at midnight. Energy will no longer be settled in 30-minute slices, instead each five-minute interval will be settled against its own dispatch price. Sound simple? Conceptually perhaps. But hundreds of millions of dollars were invested to make it happen and it’s affected all parts of the industry.

BY Ben Skinner & Ben Barnes Sep 30 2021

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Increases in negative prices: Is it a positive?

If there's one thing the Australian Energy Regulator’s State of the Energy Market report has reminded us, it’s that the National Electricity Market can be a wild ride at times. After the NEM achieved the lowest first quarter for wholesale prices since 2012, the last few months have seen an increase in price volatility.

BY Carl Kitchen Jul 08 2021

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Queensland blackout: Should we let the market run?

Following a fire at Callide C Power station on Tuesday 25 May, a series of events resulted in multiple generators disconnecting and 2,300MW of demand being interrupted. This was the most severe event in the NEM since SA's black system of 2016. Like all serious power system incidents, there was a complex chain of issues that will take some time to unpick.

BY Ben Skinner May 27 2021

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South Australia: Famine one day, feast the next (but one)

South Australia could borrow a slogan from another state based on recent vagaries and challenges thrown up by its energy grid. One day it experienced spot prices exceeding $5000/MWh six times between 6pm and midnight and two days later it was reporting near-record minimum demand, which required the step of curtailing rooftop solar to ensure grid stability.

BY Carl Kitchen May 20 2021

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Renewables in the NEM: Are they leading to price extremes?

With the ongoing growth of renewables in Australia there has been speculation of the overall impact this will have on an energy-only market like the NEM and in particular, its potential influence on spot prices.

BY Carl Kitchen Aug 20 2020

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New report into scheduling and ahead markets

We are pleased to publish a major report the AEC commissioned into the question of Scheduling and Ahead Markets, prepared by the National Electricity Market economists, David Smith and Veronika Nemes of Creative Energy Consulting.

BY Ben Skinner Jul 02 2020

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Paying for Primary Frequency Response: Double-sided Causer Pays

A new report of an investigation into a promising market mechanism to support Primary Frequency Response from generators and batteries has just been released. The investigation was sponsored by our Queensland-based generator member, CS Energy, and carried out by well-known technical consultants to the industry, Intelligent Energy Systems.

BY Ben Skinner Jun 04 2020

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Setting the mark: Why price limits should change in WA

Alongside the lofty energy reforms being rolled out in Western Australia the annual review of the energy price limits has quietly captured the attention of market participants and industry watchers.

BY Graham Pearson May 28 2020

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Reaching new heights: NEM system costs

Last week AEMO released its latest Quarterly Energy Dynamics Report with the majority of coverage focused on the fact that average NEM spot prices fell to their lowest level since the fourth quarter of 2016.

BY Carl Kitchen Apr 30 2020

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South Australia's surprise RRO

The South Australian Government’s decision to invoke the Retailer Reliability Obligation for the state came as a surprise to the energy sector, especially given the Australian Energy Market Operator did not flag any reliability issues in its most recent Electricity Statement of Opportunities. So how did this come about?

BY Ben Skinner & Carl Kitchen Jan 30 2020

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Wholesale Demand Response Mechanism: Poised to go ahead

Today the AEMC published its draft determination on a Wholesale Demand Response Mechanism. The concept first emerged in the AEMC’s ground-breaking Power of Choice Review in 2011, and was subsequently developed, assessed, rejected, re-emerged and is now on the verge of being imposed on the market. We take a look at what all the fuss is about that has kept it in, and out, and back, in play for so long.

BY Ben Skinner Jul 18 2019

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Wholesale price debate reignites

The Victorian Energy Policy Centre released a paper into wholesale prices following the closure of the Hazelwood power station this week.

BY Carl Kitchen Mar 28 2019

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How competitive is the NSW wholesale electricity market?

In its interim report last year, the Australian Consumer and Competition Commission raised concerns about the highly concentrated nature of the National Electricity Market.” As the final report is due to be released in July, we examine this claim with a detailed look at the NSW wholesale market

BY Matthew Warren Mar 27 2019

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The costs of reliability: Handle with care

With the recent load shedding in Victoria system reliability continues to be in the headlines. The concept of reliability and loss of power due to insufficient supply are often misunderstood and confused with network outages and system security. This has been recognised by two significant pieces of work by the Australian Energy Market Commission and the Grattan Institute. We take a look…

BY Carl Kitchen Feb 14 2019

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NEM: Technology and policy shifting the market

The National Electricity Market is the subject of numerous proposed government interventions, much of it appears to be driven by a view from government and regulators that the market is insufficiently competitive. Respected economist, Rajat Sood, has contemplated that issue and the profound technological and policy shifts that are underway. What his report found is very significant.

BY Ben Skinner Feb 07 2019

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Generator rebidding: Fair game for criticism?

Earlier this year generators were put under the microscope following claims that they were “gaming” the market and, as a result, costing consumers millions of dollars. But is that what the AEMC found when it took a closer look.

BY Carl Kitchen Oct 18 2018

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Electricity exports: What did the NEM do last summer?

With the close of summer, a media report was quick to highlight that New South Wales power stations had “kept the lights on in Victoria” [i]. This was the first summer in which Victoria did not have access to the 1600MW of baseload generation provided by the Hazelwood brown-coal fired power station, which closed in March 2017.

BY Carol Tran Mar 09 2018

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