September & October 2024

By Aaron Bool

The National Electricity Market (NEM) in September and October experienced significant fluctuations in demand, record-breaking low demand events, and notable curtailment of renewable energy resources. A combination of severe weather conditions across various regions led to outages, system disruptions, and subsequent price volatility. The months were marked by historic low-demand records, AEMO-issued Minimum System Load (MSL) notices, and brief high spot price episodes in South Australia. October continued the trend of demand reduction records, driven by weather impacts and demand management initiatives, highlighting a challenging landscape of volatility and adaptation for the NEM.

Review of Market Events

September began with wild weather in Tasmania, leading to extensive power outages affecting 30,000 residents. The turbulent conditions extended to South Australia and Victoria, resulting in numerous network outages and constraints across these states. Windy conditions supported elevated wind generation, though significant curtailment of renewable resources—79.2% of solar and 53.6% of wind—was recorded across the NEM due to low demand in New South Wales, Queensland, South Australia, and Victoria.

Midway through September, an AEMO IT system failure triggered a brief market suspension. This affected the electricity market’s dispatch processes, impacting the AEMO’s ability to manage constraints. Coinciding with this, Callide Power Station saw an unplanned trip and a partial outage that was extended for further performance testing. Later in the month, South Australia encountered a Lack of Reserve 2 (LOR2) alert due to forecast reserve shortfalls, highlighting grid stability challenges in the region.

At the end of September, New South Wales set two new records for minimum demand, reaching unprecedented lows of 3,307 MW and then 3,281 MW the following day. The NEM continued to witness substantial solar curtailments, peaking at 75%, alongside brief periods of elevated spot prices in South Australia. Additionally, AEMO issued its second-ever MSL notice and event for Victoria in anticipation of low demand due to the AFL Grand Final Day. There were subsequent MSL forecasts, however, they were later cancelled and did not materialise.

The trend of low demand persisted in October, as New South Wales set a new minimum demand record of approximately 3,250 MW. This was followed by further MSL forecasts in Victoria, several of which were cancelled then reinstated, but ultimately did not eventuate. Queensland received an LOR2 forecast as reserve levels came under pressure, emphasising ongoing capacity concerns in the region.

The middle of October brought volatile spot prices to South Australia, with prices reaching the cap of $17,500/MWh during a period of destructive weather. Severe storms caused significant damage across the SA-NSW-VIC border region, including the Broken Hill region, downing 23 transmission towers and 6 Stobie poles and leading to complicated outages. In certain areas of South Australia, it took a few days to fully restore services and bring the affected renewable generation back online.

The market saw unprecedented lows later in October, with demand minimisation initiatives driving South Australia to a record low market demand of -232 MW. NEM-wide, the demand dropped below 10,000 MW for the first time ever, with NSW hitting another record minimum of 3,150 MW. Broken Hill faced reliability challenges, with its backup generator tripping offline three times over the latter half of the month due to complications arising from the earlier severe storms. Toward the end of October, AEMO issued further MSL1 forecasts for Victoria, and the NEM experienced a new record low market demand, dipping to approximately 9,900 MW, with NSW reaching a low of 3,100 MW.

Overall, September and October showcased a continued reliance on curtailment measures, low-demand management, and response mechanisms to maintain stability amid demand reduction and challenging weather impacts across the NEM.

Recent Highlights

• In October, AGL successfully trailing a two-shift operation at Bayswater Power Station, allowing the plant to avoid low-price periods during the day while maximising its supply during peak demand times. Linked in
• October also saw AEMO implement updated procedures to reduce the risk of South Australia being isolated from the grid during transmission outages, enhancing reliability through adjustments to the VIC-SA interconnector and stricter frequency controls. AEMO
• The AFR Energy and Climate Summit in October highlighted Australia’s energy transition complexities, with renewables expanding while fossil fuels remain critical for energy security. Key questions included investment frameworks, hydrogen’s future, and policies like ‘Future Made in Australia’ to drive clean industries forward. AFR

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