NEMMCO's role in forecasting the future of the NEM
NEMMCO's functions include a requirement to coordinate planning for the interconnected power system on the east coast of Australia. In doing this, NEMMCO provides forecasts of supply/demand balance over 4 general timeframes, as follows:
Real-Time
In dispatching the market, NEMMCO also produces a price forecast for the market out till 4am tomorrow, or the day after (depending
what time in the day we are currently at). This price forecast is formed from NEMMCO's estimate of what the demand will be for each
half-hour of the forecast time horizon, and generator's current bids to supply. The price forecast (called "predispatch") is updated
every half-hour by NEMMCO.
NEMMCO's half-hour predispatch forecast is updated through the NEM-Watch application, and is further described
on the NEM-Watch Portal.
Short-Term
To provide a greater level of information to the market, NEMMCO also generates a one-week look-ahead, which is updated every 2 hours. For this forecast, NEMMCO generates three different demand forecasts:
- 90% probability of exceedence (which would be exceeded 9 time out of 10)
- 50% probability of exceedence
- 10% probability of exceedence (i.e. an extreme weather forecast).
With these forecasts, and taking into account the generator offers of capacity over the coming week, NEMMCO calculates a surplus
reserve that is likely to be available in each region.
If NEMMCO forecasts a deficit of surplus reserve at any stage over the coming week, then NEMMCO may issue a
low reserve notice as a Market Notice, which can be seen through NEMforecast. Such notices are issued in order to:
- Indicate to the market a pending shortfall and hence encourage participants to change operational plans to alleviate the pending shortfall; and
- To explain the reasons behind any direction NEMMCO issues, if it needs to do this.
This forecast is called "Short Term PASA", with PASA being an acronym of "Projected Assessment of System Adequacy".
We've compiled a page that explains the ST PASA data set in more detail.
Medium-Term
For NEMMCO, medium term represents the coming 2 year period.
This period is generally too short for new generators to be constructed (if construction has not already commenced) hence the focus
of the forecast is the current installed generation capacity base, and the generator company's plans to have this plant available, or
unavailable (for maintenance or other reasons).
Over this medium term horizon, NEMMCO generates a single demand forecast - which is the peak demand each day for the coming 2 years
from Sunday morning. The demand forecast is a 10% probability of exceedence forecast, which means that it the demand that might
occur in extreme weather. As such, the levels of demand forecast are unlikely to be met, in reality.
However, they fulfil NEMMCO's requirements as they present a conservative view of the amount of generation capacity that will need to
be available in order to meet this demand. In conjunction with this demand forecast, NEMMCO takes into account the generator's
currently stated availability plans for their capacity to calculate a surplus reserve that is likely to be available in each region.
If NEMMCO forecasts a deficit of surplus reserve at any stage over the medium term period, then NEMMCO may
issue a low reserve notice as a Market Notice, which can be seen through NEMforecast.
This forecast is called "Medium Term PASA", with PASA being an acronym of "Projected Assessment of System Adequacy".
We've compiled a page that explains the MT PASA data set in more detail.
Long-Term
To provide some indication to the market of the extent to which new generation capacity may be required, each year NEMMCO updates a "Statement of Opportunities", which incorporates a number of valuable data sets, including:
- Demand forecasts for the coming 10 year period for each region;
- A listing of new generation developments - those "Committed" and others merely just under consideration by various parties.
- Indications of transmission limitations across the NEM, and how they could be alleviated over the longer term.
Currently NEMforecast does not include any information covering this long term time horizon.
In the years that it has been released, our "Power Supply Schematic" Market MapTM provides
a visual representation of NEMMCO's Statement of
Opportunities - we call it our "SOO on a page".