Case Study
Making the complex simple
APPLIES TO
All asset types
STAGE
Commissioning and Operations
It can be easy for owners to think the NEM is a simple market and adopt a ‘set and forget’ attitude, particularly if their assets use automated bidding software.
However, sometimes operating an asset in the NEM can become very complex and operationally difficult very quickly.
A great example of this complexity was during the Market Suspension Event between 10-24 June 2022 where a combination of factors led to various National Electricity Rule (NER) regimes being applied that only a few people had seen before.
If you would like further background on this event, we suggest reading AEMO’s market event report here >.
CHALLENGE
Administered Pricing started in QLD on 12 June and extended to all mainland regions on the 13th.
AEMO directions and intervention pricing were introduced that same day and all market regions were eventually suspended from 14:00 15 June until 04:00 23 June.
The suspension, combined with intervention and administered pricing is a complex arrangement that was imposed in minutes. Amongst other things it caused large gaps between the values you should bid versus the values you get paid; automated bidding software cannot cope.
Asset owners who did not understand very quickly what had happened, and who had not actioned the correct response, risked losing significant sums of money.
SOLUTION
With over 80 years of collective experience with the NER, we carefully watched events develop and kept our clients informed. When the suspension came, we knew what to do.
We acted in minutes to stop any automated bidding software, our traders placed manual bids and we talked to our clients and emailed regularly with updates to ensure they were informed and approved any changes.
To know how to bid profitably and explain this complex situation to our clients needed a deep understanding of the NER. For this event, that included knowing which prices determine dispatch and which (different) prices our clients would get paid. It also included arcane but vital items such as Regional Override Prices.
BENEFIT
Overwatch Energy made sure that our clients’ assets were bid in the most profitable way, saving them significant sums during this two-week period and managing very difficult market conditions.
Equally important, our clients were able to quickly understand what was happening, what regimes were being applied and how best their assets should respond. We helped them make sense of the complexity and we continued that support as the situation changed – all core to our full service offer.
This was valuable not just for our client’s operational staff but with so much media attention around the event, our clients could also reassure their wider stakeholders. They understood what was happening and that they were in control.
