SUPPLY AND DEMAND IN THE AUSTRALIAN ENERGY MARKET
Jason West Senior Energy Market Consultant, Energy Exemplar
INTRODUCTION TO ENERGY EXEMPLAR
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Energy Exemplar
Develops and commercialize PLEXOS® Integrated Energy Model.
PLEXOS® development and support
Implementation and Training
Commercial Databases
Solutions according to customer request
Cloud & Cluster Computing
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Penetration in the Current Market
Exceeded 1,155 PLEXOS licenses at 185 sites in 38 countries
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Function & Scalability
Power system model scalable to thousands of generators and transmission lines and nodes
• System size:
– From single generator or node to 1000’s
– Largest system studied:
• Eastern Interconnect (US)
• 50000+ nodes
• 7000+ generators
• Simulation interval:
– Switch easily between hourly, half-hourly, 10-min, 5-min, etc.
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PLEXOS Key Functions
PLEXOS Functions
Price Forecasting
Renewable Integration
Investment Planning
Ancillary Services & Energy Co-
Opt
Risk Management
Portfolio Optimisation
Dispatch Optimisation
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How Accurate is PLEXOS?
Back test of 2012/13 spot market price
Back test validates the model and dataset
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KEY INFLUENCING FACTORS WHEN GAS PRICE FORECASTING
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PLEXOS Australian database
• PLEXOS Australian Electricity Database
• PLEXOS Australian Gas Database
• PLEXOS WA Database
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Heating Oil Futures Price
10 Chart courtesy of Stockcharts.com
Downtrend since 2011
2005
Copper Price
11 Chart courtesy of Stockcharts.com
Downtrend since 2011
Copper and Energy
12 Chart courtesy of Stockcharts.com
Downtrend since 2011
Copper
Heating Oil
1980 2005 GFC
2015
Uranium Oxide Price
13 Chart courtesy of InfoMine.com
Natural Gas – Henry Hub Futures Price
14 Chart courtesy of Stockcharts.com
2009
Forecasting What?
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• Contract demand / supply balance
• Physical demand / supply balance
• Fuel Prices
• Regulation
• Government Policy
• Generator / Retailer strategies
• Inter-connectors
• Plant performance (reliability)
• Contract Types
• Generator Balance Sheet
• New entrant timing and economics
• Large I&C retail load coming to market
• Weather forecasts
• Risk Management Policies
• Traders / Speculators incentives
Factors Affecting the Contract Market
Applied to a model
To…..
Forecast Electricity Spot & Gas Prices
Blue font: Can be captured in PLEXOS
Net Generation Profile in Eastern Australia
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Generator Capacity Schedule Generator Capacity Schedule
Mt. Mercer 131 2014 Morwell/EnergyBrix -189 August 2014
Gullen Range 166 November 2014 Redbank -144 August 2014
Snowtown Stage 2 270 November 2014 Wallerawang C -1,000 November 2014
Wilga Park B 6 January 2015 Pelican Point CGT U2 -239 April 2015
Royalla 20 February 2015 Tamar Valley CCGT -208 August 2015
Portland 47 February 2015 Anglesea -156 August 2015
Boco Rock Stage 1 113 March 2015 Tamar Valley Peaking -58 withdrawn, return by Jun-16
Chepstowe 6 March 2015 Mackay GT -34 2016
Taralga 107 May 2015 Collinsville -190 June 2016
Bald Hills Phase 1 107 May 2015 Torrens Island A -480 2017
Nyngan 102 July 2015 Smithfield -171 2017
Broken Hill 53 August 2015 Northern -546 March 2017
Moore 56 March 2016 Playford B -240 mothballed, retirement by Apr-17
Ararat 240 May 2017 Bell Bay Three -120 January 2018
Liddell -2,000 2022
Mt Stuart -424 2023
New Builds Retirements
Net change to NEM Generation Capacity
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Tasmania Hydro Levels
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• El Nino
• Record Warm Sea Surface Temperatures
Snowy Hydro • Water levels currently at 50%
• PLEXOS can model – Different initial conditions for water levels
– Perform sensitivity analysis for differing water availabilities
– Perform 5 minute and 30 minute simulation to assess impact of different hydro generation
– Emulates the AEMO Market clearing engine
– Does less coal generation in the NEM result in Snowy supplying more swaps?
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CASE STUDY: INTEGRATING GAS AND ELECTRICITY
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PLEXOS database objects for modelling gas
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Case Study: Co-optimisation Example
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Energy Exemplar 22
~
~ Electricity Market
Gas Generator G1
Coal Generator G2
Gas Industrial Demand 1 Gas Industrial Demand 2
Gas Residential Demand
Electrical System
Spot Gas Market
Gas Storage
Take or Pay contract
Case Study: Co-optimisation Example
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GasGen1
Take or Pay Contract
Sell into Spot Market
(spot gas > ToP)
Powergen (spot elec >
SRMC)
Inject in Storage
Withdraw from Storage
Sell into Spot Market
Powergen
Buy from Spot Market
Powergen
Inject in Storage Usually modelled but not part of this example
Profit analysis - 1 year simulation
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(in MM$)
Electric Electric + Gas Markets
Electric + Gas Markets + Gas Storages
Sales to Electric Pool 29 28.5 26.5
Sales to Gas Spot Market - 24 28
Fuel Costs 24 42.5 42.5
Total Profit 5 10 12
MODELLING THE IMPACT OF LNG DEMAND ON THE EAST COAST GAS MARKET CASE STUDY: NSW
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Study topology
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Study assumptions • Maximization of market welfare by taking a least-cost modelling approach.
• Perfectly competitive market – no market power of participants
• LNG netback price of $13/GJ in QLD
• LNG demand - 6 trains totalling 1518PJ/Year by 2023
• New build variables for CSG development in NSW
• Production and transmission constraints from AEMO GSOO
• Published AEMO natural gas load used
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Results – Scenario 1
• In context, going by NSW demand of 155PJ in 2012, this equates to $532M in total savings by 2023
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Results – Scenario 2
• In context, going by NSW demand of 155PJ in 2012, this equates to $1.6B in total savings by 2023 29
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