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26 Mar 2019

Insider 35: Why the Wholesale Demand Response Rule Change is Stuck and How to Unstick it

Since November 2018 the AEMC has been running a rule change process to deal with three proposals for, or relating to, a Wholesale Demand Response Mechanism.

Insider 35: Why the Wholesale Demand Response Rule Change is Stuck and How to Unstick it

Since November 2018 the AEMC has been running a rule change process to deal with three proposals for, or relating to, a Wholesale Demand Response Mechanism.  Such attempts, or related attempts to constraint existing demand response to be more controllable and visible, are one of the great perennials of the NEM.  Even prior to the NEM, we grappled with the same issue during the Victorian reforms from 1993. The most recent attempt to deal with the demand side was in 2016 when Snowy Hydro proposed a rule change that would have required price responsive load to be scheduled.  That went nowhere; according to the AEMC it wasn’t worth doing.

The latest attempt appears to be far more serious but has hit a road block.  According to reports from the March 2019 AEMC workshop on the topic, no-one knows how to measure demand response satisfactorily.  Also, and while hardly recognised as a problem right now, there currently seems to be passive acceptance that any approach needs a middle man to work, so demand responses can be aggregated and scheduled.  Such an approach will throttle demand response, just when the NEM needs as much as it can get.

In this brief article, IES CEO, Hugh Bannister, suggests a way to expose willing retail customers to short term spot price volatility while keeping risk to a manageable level.  He also outlines what needs to be done to allow retail customers to bypass the middle man, while ensuring that the system is not destabilised by errant short term behaviour.

These concepts need to be fleshed out in more detail.  They should then be considered as possible “more preferable” options to achieve the goals of the current rule changes.

IES presented to the AEMC on these topics on 20 March 2019.  The presentation can be downloaded here.

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24 Oct 2018

Insider 33: The Failed NEM and How to Fix It

In this opiniated piece, IES CEO, Hugh Bannister, gives his perspective on how the National Electricity Market (NEM) got to be in such poor shape.

Insider 33: The Failed NEM and How to Fix It

In this opiniated piece, IES CEO, Hugh Bannister, gives his perspective on how the National Electricity Market (NEM) got to be in such poor shape.   Heavy handed government intervention is the evidence of that failure, but the article argues that it is persistent and wilful government failure in the administration and regulation of the NEM that has led inexorably to its current sorry state.

While popular debate rightly focusses on the renewable energy as posing a challenges for system security and reliability, the drivers for high retail prices are many and varied, and very little to do with renewables.  At the core, though, is a philosophy that has sought to profit from privatising the industry without putting in place arrangements that would ensure success from the consumer’s perspective.

 Hugh concludes the paper with a 9 Point Plan for recovery.  The details of what a recovery might look like require further discussion and debate.  This challenge will be taken up in future Insiders.

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09 Mar 2018

Insider 31: Reducing Artificial Price Volatility in the NEM

In engineering, designing to reduce or eliminate discontinuities and resulting shocks is good practice, delivering more robust and reliable operation as well as greater efficiency.

Insider 31: Reducing Artificial Price Volatility in the NEM

In engineering, designing to reduce or eliminate discontinuities and resulting shocks is good practice, delivering more robust and reliable operation as well as greater efficiency.

In this article IES CEO, Hugh Bannister, argues that this ought to be a design goal for NEM market machinery.  He considers two elements of the NEM market machinery that could be improved for smoother operation and lower ancillary service costs.  The changes required are not large, and could be built into the re-design of systems for 5 minute settlement.

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03 Nov 2017

Insider 30: The National Energy Guarantee

In October the Federal Government announced the National Energy Guarantee (NEG) as a major reform of the National Electricity Market (NEM).

This edition of Insiders discusses these issues.

Insider 30: The National Energy Guarantee

In October the Federal Government announced the National Energy Guarantee (NEG) as a major reform of the National Electricity Market (NEM). 

The NEG could be the biggest intervention by government in the history of the NEM.

This edition of Insiders discusses these issues. 

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09 Feb 2017

The South Australian Power Outage in Three Simple Charts

40,000 South Australian electricity customers were without power yesterday and the market operator was forced to shed load.

The South Australian Power Outage in Three Simple Charts

40,000 South Australian electricity customers were without power yesterday and the market operator was forced to shed load. This article explains what happened via three simple charts.

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21 Oct 2016

Presentation to the EUAA’s South Australian Energy Forum on 19 October

On 19 October 2016 our CEO, Hugh Bannister, presented to the EUAA’s South Australian Energy Forum event in Adelaide with title: What’s Happening with Wholesale Electricity Prices in South Australia?

Presentation to the EUAA’s South Australian Energy Forum on 19 October

Events in recent months in South Australia have focused government and industry attention on how the cost and security of electricity supply are being affected by the push to renewables.

Our CEO, Hugh Bannister, joined with the South Australian Energy Minister and other senior industry people to review these issues during this forum in Adelaide on 19 October.  Hugh’s presentation concluded with some policy options that could improve outcomes in future.  While there are solutions to the problems that have been highlighted in South Australia in recent months, they do require a focused policy response.

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10 Oct 2016

Seminar Presentation to the AIE Symposium 2016 on 10th October

On the 10th October, our CEO, Hugh Bannister joined other senior electricity industry people to present to a packed seminar, run by the Australian Institute of Energy.

Seminar Presentation to the AIE Symposium 2016 on 10th October

Our CEO, Hugh Bannister, joined other senior electricity industry people to present to a packed seminar run by the Australian Institute of Energy (AIE) on 10 October, 2016.

The topic was the Renewable Energy Target (RET), whether it could be achieved and what might happen beyond.

The events in South Australia in July and September provided a compelling background to the discussion.

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30 Sep 2016

Keynote Presentation to the IEEE POWERCON 2016 on 30 September

On 30 September 2016 our CEO, Hugh Bannister, presented to the IEEE POWERCON event in Wollongong with title: Can the National Electricity Market Survive New Technology?

Keynote Presentation to the IEEE POWERCON 2016 on 30 September

On 30 September 2016 our CEO, Hugh Bannister, presented to the IEEE POWERCON event in Wollongong with title: Can the National Electricity Market Survive New Technology?

You can download the Power Point slides from our website here.

For more information about this event, please visit IEEE POWERCON website: http://www.ieee-powercon.org/

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29 Aug 2016

Presentation to the EUAA Victorian Energy Forum on 24 August

On 24 August our CEO, Hugh Bannister, presented to the EUAA’s Victorian Energy Forum. Using a sequence of NEO charts covering the period of market volatility in South Australia in June and July, 2016, his presentation takes a forensic look at the factors that drove those events.

Presentation to the EUAA Victorian Energy Forum on 24 August

On 24 August our CEO, Hugh Bannister, presented to the EUAA’s Victorian Energy Forum.  Using a sequence of NEO charts covering the period of market volatility in South Australia in June and July, 2016, his presentation takes a forensic look at the factors that drove those events.

Hugh demonstrated the relative importance of a period of high load due to a cold snap, low wind output, gas plant withdrawal from the market and interconnector outage as key factors driving the market volatility.  Overlaying this was tightness in the gas supply and the closure of Northern Power station, although this closure can be attributed more to the rising cost of mining Leigh Creek coal than to the high penetration on wind in South Australia.

Hugh concluded his presentation with some suggestions for policy responses. His presentation along with those of other presenters at the Forum can be found at http://euaa.com.au/victorian-energy-forum-2016



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