Australian Chart of the week | “Feel the flow”: changing interconnection dynamics post Liddell

Locational constraints, high renewable penetration zones and fossil fuel failures or retirements are changing the nature of electricity flows in the market. As a result, Interconnection in the National Electricity Market is playing an increasingly important role in balancing supply and demand.

On 4 January 2020, bushfires caused transmission outages at two substations which connect VIC and NSW in the Snowy region. This, therefore, reduced available capacity (via interconnection or Snowy generation) in NSW. Consequently, causing very tight supply/demand balance resulting in a spike in the spot price. It also prompted demand response and the reserve trader to activate to ensure that the energy system remained balanced.

While the circumstances surrounding this event are extreme, we see more credible contingency events in place to restrict flows on interconnectors and even islanding events. It is a reminder of the value that interconnection in the National Electricity Market offers for energy security. It does make us ask the question – how will interconnection flows change in a post-Liddell world?

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