January was, according to the Bureau of Meteorology (BOM), officially the hottest on record for Australia due to a series of heatwaves unprecedented in size and length.
When we talk about heat waves, we don’t just mean a hot day. They are defined as three or more days in a row, when both daytime and night time temperatures are unusually high.
Temperature and heat waves have a significant impact on the price and availability of power, as the grid is asked to work harder in hotter conditions.
Put simply, the grid feels the heat just like we do.
On Thursday 24th January and Friday 25 January 2019 we experienced such a heat wave.
As Australians flicked on fans, air conditioners and pool pumps to stay cool, the pressure on the grid mounted. Add to this a number of planned and unplanned generator unit outages at coal power plants and interconnector constraints, and the grid was under extreme pressure also pushing up prices.
When rare events, like this happen, a number of contingency plans put in place by the Australian Energy Market Operator (AEMO) come into play.
AEMO’s role is to maintain stability in the market. To do this, it has defined three lack of reserve (LOR) stages, which identify key steps to securing the grid in times of need.
● LOR 1 is simply a pre-warning that there may not be enough supply to meet demand
● LOR 2 means that additional capacity is needed. At this stage, demand response mechanisms such as RERT begin
● LOR 3 is the most critical final stage, where lack of supply will be balanced by forced load-shedding or rolling blackouts
While LOR 2 was only called on Thursday, all three stages occurred on Friday, resulting in strategic power outages and the RERT demand response program being called in VIC and SA.
Many Flow Power customers participated in RERT on Thursday and Friday, going the extra mile to reduce their consumption and support the grid.
The graphs below show the impact Flow Power customers were able to achieve on Friday 25th January in SA and VIC. They decreased consumption when the grid needed it most.
On Friday the Cumulative Price Threshold (CPT) also came into play. This was the first time in 10 years that prices reached the CPT.
This occurred because the 7-day rolling sum of market prices breached a price threshold and an administered price cap of $300 per MWh was set. This cap was set by AEMO to moderate prices.
While prices in the market appeared at $300 per MWh or lower during the price threshold, which extended for days after the heatwave, this didn’t reflect the underlying price in VIC and SA.
What you can do to help
1. Invest in solar or batteries
2. Sign up to demand response programs
3. Actively monitor and control your energy use
Demand response programs, like RERT, give businesses an incentive to power down. To find one in your state read more here.