* Power grid pushed to its limit, prices soar to
* Authorities in New South Wales order some businesses to
* Residents asked to minimise electricity use
* Heatwave triggers power price spike: tmsnrt.rs/2kyvPkU
(Adds comment, detail)
By Henning Gloystein
SINGAPORE, Feb 10 Extreme heat in Australia has
caused power prices to soar to an unprecedented A$14,000 per
megawatt-hour (MWh) during peak demand periods in New South
Wales as power stations struggle to meet skyrocketing cooling
Wholesale power prices for immediate dispatch in the state,
Australia's most populous, soared to an unprecedented A$14,000
per MWh ($10,687) on Friday afternoon, up from between
A$100-A$200 per MWh EL-30MIN-NSW. The surge could trigger
controlled outages by utilities trying to control their power
"This is a highly unusual event that has driven the futures
market to unprecedented levels. The last NSW major price event
occurred in Q1 2011, but this event easily eclipses that," said
Andrew Koscharsky, director at energy firm RCMA Group in
Singapore, which trades in Australian power products.
Temperatures of 40 degrees Celsius in and around Sydney,
Australia's biggest city, have pushed up cooling demand so far
that authorities are preparing to order some businesses to shut
down, a measure known as load shedding, while asking residents
to minimise electricity consumption.
Because of the heat, peak demand in New South Wales reached
15,000 MWh per hour (MWh/h), up from a norm of below 9,000
MWh/h. Power market data in Thomson Reuters Eikon showed that
peak demand on Saturday would reach 14,000 MWh/h, versus a norm
of under 8,000 MWh/h.
And the heatwave is not yet over, with meteorological data
in Eikon showing the heat sticking around into early next week.
Power is sold wholesale to large companies who operate an
active electricity trading firm, or in fixed retail prices to
residents and small businesses.
Retail customers will not be affected by the price spike,
but businesses who buy electricity in the wholesale market, or
speculative traders, could be exposed.
Koscharsky said that electricity "retailers, industrial
customers who chose to take spot market over a fixed price
contract, and speculators who short the market via ASX listed
Electricity Futures Contracts" could be most affected by the
($1 = 1.3099 Australian dollars)
(Reporting by Henning Gloystein; Editing by Christian