AEMO has released our fourth Quarterly Energy Dynamics (QED) report for 2017 (Q4) to provide insider information about energy market dynamics, trends and outcomes.

This QED report covers the period from 1 October to 31 December 2017, and offers observations from both the National Electricity Market (NEM) and the eastern and south-eastern gas markets.

Highlights include a slight decrease of wholesale electricity and gas prices, a reduction in energy demand associated with seasonal temperature increases, a significant reduction in hydro generation compared to earlier in 2017, and a 9% increase in gas demand driven by record deliveries to Curtis Island.

It was also the second highest quarter on record for Frequency Control Ancillary Services (FCAS) costs. (FCAS services are market mechanisms employed to correct frequency deviations that occur due to imbalances between supply and demand.) FCAS market costs of $58 million in Q4 pushed the annual costs to a record high of over $200 million.

At the same time, FCAS costs in Q4 2017 were $13 million lower than Q3 2017, as Regulation FCAS costs declined by $9.1 million and Contingency Raise FCAS costs decreased by $5.2 million.

The entry of two new participants, Hornsdale Power Reserve Battery (HPR) and EnerNOC, into the FCAS markets contributed to the reduction in FCAS costs.

As a first in the history of the NEM, EnerNOC entered the FCAS markets as a response to aggregated demand in October 2017. The HPR in South Australia was commissioned in late 2017 and became active in all NEM markets by December 2017.

In other news from Q4 2017, the QED reported that nine large-scale renewable projects with a total capacity of 1,200 MW received a Final Investment Decision (FID). A further 533 MW Capacity of projects announced the signing of a Power-Purchase Agreement (PPA). These milestones continued a strong trend, with over 5,000 MW of new renewable energy projects receiving FID or PPA since Q4 2016.

AEMO is committed to enabling the supply of economically efficient, secure and reliable electricity and gas to all consumers, and to building everyone’s knowledge about energy systems and markets in Australia. This QED is the first of its kind published on AEMO’s website and we plan to produce this report each quarter as part of our regular market monitoring and reporting activities.

To view the full report please click here.