2011 Monitoring reports

The total frequency keeping costs during August 2011 were the highest since December 2009, when the system operator included a revised frequency keeper selection method in its new market system. The majority of these costs ($6.4m) were due to constrained on costs for the selected frequency keeper.

Following the introduction of the new market system project by the system operator in mid 2009, the modelling practice for the HVDC in the final pricing schedule changed and increased the risk of price separation. It is important that market participants are aware of the change and of its effect on price volatility.

Since the introduction of the simultaneous feasibility test, different but very similar constraints can be applied to parallel transmission lines. The similar constraints undermine the ability of the high spring washer resolution process to mitigate extreme prices.

This report explains the underlying high spring washer resolution issue through analysis of some recent market situations.

We released a report on events surrounding plant being constrained-on in late January 2011, particularly Huntly Unit 5 on 23-27 January 2011.

Wholesale spot prices began to increase towards the end of November 2010 and climbed rapidly throughout the first three weeks of December. The average price for the first 22 days of December was $135.90/MWh, an increase of 144% over the November average and a 158% increase over the 1-22 December 2009 average. The rise was likely due to uncertainty regarding hydrology, the planned Maui outage in February 2011, and thermal plant availability.