adrian kemp, nera - western australian electricity market trends – implications for market and...

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WA Electricity Market Trends Implications for Market and Regulatory Reform Perth 12 March 2014 Adrian Kemp Director

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Adrian Kemp, Director, NERA Economic Consulting delivered this presentation at the 8th Annual WA Power & Gas Conference 2014. The conference represents a timely meeting for the industry to hear about the current changes affecting the WA energy and electricity market. For more information, visit http://www.informa.com.au/wapowerconf14

TRANSCRIPT

Page 1: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

WA Electricity Market Trends

Implications for Market and Regulatory Reform

Perth

12 March 2014

Adrian Kemp

Director

Page 2: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

1

Electricity costs in WA have

increased significantly

Page 3: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

2

Similar electricity cost increases

have occurred in other states

New South Wales

South Australia

Page 4: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

3

Forecasting demand in the SWIS

has been challenging

MW Maximum Demand – 50% POE

Page 5: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

4

Total consumption has increased

in the SWIS

MWh

Page 6: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

5

The rapid growth in Solar PV is

unprecedented

Page 7: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

6

The way we generate and

consume electricity is changing

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

NEM commenced

operation

Today

Air-con

1.8 million

households

Air-con

5.4 million

households

PV

2.8 GW

PV

0.1 GW

? ? ?

Page 8: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

7

Demand is also difficult to

forecast in the NEM

MW

Maximum Demand NSW – 50% POE

Page 9: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

8

SWIS demand by month

Page 10: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

9

NEM demand by month

Page 11: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

10

Reserve capacity requirement

has outpaced actual demand

MW

WA Reserve Capacity Requirement

Page 12: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

11

Capacity and maximum demand has

become disconnected - New South Wales

Page 13: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

12

Capacity and maximum demand has

become disconnected – South Australia

Page 14: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

13

Thermal generators are exiting and wind

farms are entering

Page 15: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

14

Capacity has entered to meet the

reserve capacity requirement

MW

Page 16: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

15

Different wholesale price

outcomes in WA and SA

Western Australia

South Australia

Page 17: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

16

PVs can change the load profile –

South Australia 2010

41 MW

1000

1100

1200

1300

1400

1500

1600

MW

2010

Page 18: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

17

PVs can change the load profile –

South Australia 2010 to 2011

41 MW

172 MW

1000

1100

1200

1300

1400

1500

1600

MW

2010 2011

Page 19: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

18

PVs can change the load profile –

South Australia 2010 to 2012

41 MW

172 MW

319 MW

1000

1100

1200

1300

1400

1500

1600

MW

2010 2011 2012

Page 20: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

19

PVs can change the load profile –

South Australia 2010 to 2013

41 MW

172 MW

319 MW

435 MW

1000

1100

1200

1300

1400

1500

1600

MW

2010 2011 2012 2013

Page 21: Adrian Kemp, NERA - Western Australian Electricity Market Trends – Implications for Market and Regulatory Reform

Contact Us

© Copyright 2013

NERA Australia Pty Ltd

All rights reserved.

Adrian Kemp

Director NERA—Sydney 0406 753 352 [email protected]