[caf]

Those price swings are reflecting the economic reality of a product which there is very limited capacity to store and for which both demand and supply can vary rapidly. In practice energy consumers and generators are both limited in their exposure to them through financial instruments like CFDs.

"brown outs on hot days" is straight up propaganda.

And at least having different pricing regions means that it's not investing in building useless generation where there isn't the demand or transmission capacity to move it to where it's required!

[xthrown1]

>"brown outs on hot days" is straight up propaganda.

https://www.9news.com.au/national/energy-shortage-explainer-...

You're right. They just had to nationalize the market last year. The brownouts were the year before that.

[caf]

"Nationalize"? No, they suspended the market-based dispatch mechanism, in accordance with the rules to which the market participants had agreed, and used centrally directed dispatch for a couple of weeks.

The market failure which required this extraordinary action was primarily the interaction of a particular cap price with two problems, both fossil-fuel related: the large increases in price of natural gas and coal due to the Ukraine war, and coal supply problems at several generators due to widespread east coast flooding resulting under the influence of La Niña . Most Australian gas and black coal is exported, so the domestic market is exposed to the internationally traded price. The gas prince increase in particular was so severe that the short-run marginal cost of gas electricity generators was above the administered price cap value. The widespread flooding also, somewhat ironically, constrained the output of some hydro generators as well, because there was no capacity downstream for more water release.

Certainly there are strong market design lessons from this, but they're around price caps and bidding behaviour. They're unrelated to the regional or nodal pricing concept which this thread was about (and there isn't really a renewable energy angle on this either).

Still don't know what brownouts you're referring to, and I follow the NEM pretty closely.

[stephen_g]

Sorry, were you in Australia? We haven't had load shedding from a LOR (Lack Of Reserve) event almost ever, and we don't commonly get browouts. That's just lies and FUD. That article is actually just "sometimes the grid operator has to ask aluminium smelters to reduce their demand a bit".

The last major power outages to do with the grid were a couple of years ago here in Queensland when a large coal unit (Callide C unit 4) literally blew up, instantly taking a a bit over 800 MW of generation off the grid. Took like three hours to get large parts of the state back on. A year or so before that there was some minor load shedding in Victoria when two coal plants were down for unexpected maintenance over a heat wave (and I think another one or two tripped out in the heat) - and actually solar and wind from other states helped minimise that. Then there was the big one, where massive storms in South Australia took out transmission lines and a bunch of generators (including some wind farms) tripped off. Of course, despite being caused by the storm destroying transmission lines, the right wing did blame the wind farms for it...

[xthrown1]

> Sorry, were you in Australia? We haven't had load shedding from a LOR (Lack Of Reserve) event almost ever, and we don't commonly get browouts. That's just lies and FUD. That article is actually just "sometimes the grid operator has to ask aluminium smelters to reduce their demand a bit".

I was a quant for one of the top 3 largest electricity retailers in Australia. A wonderful market where you take everyone's money as long as you call it green. It was shocking to see the liberal government tell the truth about renewables while labor and the greens are lying/in denial about them.