"Power prices jump in the eye of the storm"

21st June 2007

Duncan Hughes, journalist in The Australian Financial Review wrote this article (Power prices jump in the eye of the storm) about a remarkable situation that occurred on Monday 18th and Tuesday 19th June, when the NEM experienced amazingly low levels of Instantaneous Reserve Plant Margin (IRPM) as a result of an earlier than expected cold snap (and hence high evening peak in demand) and late returns from maintenance for some generation plant.

To read the article, please see either:
1)  The news release at the Fin Review; or
2)  A PDF copy of the release.

Following from the controversy generated by the article in the AFR, we took some time to analyse the situation in more detail and discovered that, prior to winter 2007, the NEM-wide IRPM had not dropped below 12%.

Putting this into context, this means that at all other times since the start of the NEM, there had been at least an additional 1,500MW of generation capacity available (i.e. not on maintenance) to meet unexpected peaks in demand, or generation plant failure etc... on this occasion the surplus generation capacity available had dropped as low as 2,473MW across all regions.

The full analysis is available on our electricity market blog at:

WattClarity.com.au