1. Anatomy

Category Archives: Anatomy

The anatomy of an energy crisis a pictorial guide, Part 2 – The Conversation AU

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In the second in my series on the crisis besetting the National Electricity Market (NEM) in eastern Australia, I look at the tightening balance of supply and demand.

Australias NEM is witnessing an unprecedented rise in spot, or wholesale, prices as market conditions tighten in response to a range of factors.

As shown above, spot prices are typically highest in summer, due in large part to the way extreme heat waves stretch demand. The historical summer average across the NEM is around $50/MWhour. As recently as 2012, summer prices were as low as $30/MWhour. With only a few days to go in the 2017 summer, prices are averaging a staggering $120/MWhour on a volume-weighted basis. Many factors have played a role, including hot weather, and the drivers vary from state to state.

In South Australia, the high prices have been accompanied by a series of rolling black-outs culminating on 8th February. Spot prices are more than twice last summer, on a volume-weighted basis, and three times the summer before that. Volatility has increased markedly, as evidenced by the way the volume-weighted price has diverged from the averaged spot price.

But the price rises and security issues have not been restricted to South Australia, with Queensland and New South Wales experiencing steeper rises in percentage terms. Current Queensland volume-weighted prices are averaging $200/MWhour, some 300% above the long-term summer average.

On the 12th February new demand records were set in Queensland, with prices averaging $700/MWhour across the day. New South Wales narrowly averted load shedding on 10th February as temperatures and spot prices soared. So far, the exception has been Victoria, where summer prices have remain relatively subdued, at levels not far above the recent average.

Demand for electrical power varies over a range of time-scales, from daily, weekly to seasonal, as well as with longer-term economic trends. A key determinant in how much power is needed on any given day is the maximum daily temperature. As shown below, the maximum daily demand marks out a characteristic boomerang shape when plotted against maximum daily temperature. The boomerang bottoms out at temperatures of around 25C when air conditioning loads are at a minimum.

As illustrated above, demand increases significantly in response to heating loads as the weather cools below 20C and cooling loads as the weather warms above 30C. The difference in demand across the weather cycles can be substantial. For example, in South Australia the maximum daily demand varies from around 1500 megawatts on a day with a maximum temperature of 25C to around 3000 megawatts during heatwaves when the temperatures exceed 40C. With minimum daily loads under 1000 megawatts, this implies well over half the generation capacity in South Australia is for peaking demand, with much of it sitting idle most of the time waiting for extreme hot weather events. In an energy-only market like the NEM, such peaking capacity demands extreme pricing accompany its dispatch in order to recoup costs. In reality, to manage risks such capacity is normally hedged at a cap-contract of around $300/MWhour.

Similar patterns apply in other states, although in percentage terms the range is less severe. In Queensland the increase between 25 and extreme degree days, which top out at about 37C in Brisbane, is about 2000 megawatts or approx 30%.

A comparison of the figures above show some subtle but important differences in the South Australia and Queensland markets. Notably, the diagrams show that annual demand in Queensland has been rising progressively over the last four years, while it has been static in South Australia. The extreme weather of Sunday 12th February set a new demand record in Queensland, and well above any previous weekend day. In contrast, the 8th February peak in South Australia was lower than previous peaks. To understand why spot prices spiked to similar levels in the different regions requires a deeper dive into the local market conditions.

One reason for seasonal variability in prices is the natural variability in weather conditions, and particularly the frequency and intensity of heat waves. As illustrated below, the 2017 summer in Adelaide has been rather normal in terms of weather extremes, so far with only six days above 40C compared to seven last summer and thirteen in the 2014 summer. To date, the mean maximum is around 29.7C , more-or-less spot on the average over the last five years. As such weather variability would not seem to be the key factor driving the recent dramatic rise in spot prices.

The most significant change in the South Australian market last year was the closure in May of its last coal fired-power plant - Alintas 520 megawatt capacity Northern Power Station. Along with questions about long-term coal supply, Alintas decision to close had a lot to do with the low spot prices back in 2015.

Back then, spot prices were suppressed on the back of a fall in both domestic and industrial demand as well as the addition of new wind farms into the supply mix. As shown below, the rapid uptake of solar PV in South Australia had impacted the demand for grid based services, especially during summer, limiting price volatility, and affecting generator revenue streams via a lowering of forward contract prices. In combination, the conditions made for a significant excess in generating capacity, or capacity overhang.

Despite the falling average demand, and a changing load distribution, the peak demand during the recent heat wave reached above 3045 megawatts in the early evening of 8th February (at 6 pm Eastern Australian Standard Time). That was 340 megawatts lower than the all time South Australian peak of 3385 megawatts for South Australia on the 31st January 2011. The peak on February 8th was accompanied by a spot price of $13160/MWhour.

With the closure of Northern, any comparison with previous peak demand events should factor in any demand previously served by Northern Power Station. Before its closure Northern contributed around 420 megawatts power on average over the summer months. Without that supply available this year, the February 8th peak effectively exceeded the previous peak by around 80 megawatts in adjusted terms.

Queensland has experienced a hot summer with the maximum daily temperature in Brisbane reaching 37C for the first time since 2014, and an average daily maximum of 31.2C (at the time of writing). That is about one degree above the average of recent years. However, with only four days with a maximum temperature above 35C, compared to five in the summer of 2015, weather effects seem unlikely to fully account for the extraordinary rise in spot prices this summer.

In detail the Queensland market differs from other regions in the NEM in as much as it is the only region to have experienced significant demand growth in recent years. Mapping the change of demand growth over the years, by time of day, helps reveal the drivers for market tightening, as shown below firstly in absolute terms, and then in relative terms normalised against 2014.

Between 2009 and 2014, summer demand fell by about 400 megawatts (or 6%), with the greatest change occurring in the middle of day. This pattern is akin to the signal in South Australia shown above, and reflects how the growing deployment of domestic rooftop PV was revealed to the market as a demand reduction.

Since, 2014 summer demand has grown appreciably across all times of day, skewed somewhat towards the evening. Relative to 2014, demand is up by almost 800 megawatts across the board, and by as much as 1200 megawatts at 8 pm. The ~800 megawatt base increase in demand can be attributed in large part to new industrial loads associated with the commissioning of the LNG export gas processing facilities at Curtis Island.

In terms of extreme events, it is notable that February 12th this year set a new Queensland demand record at 5.30 pm of 9368 megawatts (at the half hour settlement
period) with a spot price of $9005. This is extraordinary given it was a Sunday, a day which normally sees demand down several percentage points on corresponding weekdays with similar temperature conditions.

Victoria is the exception to the trend of rising spot prices, with the summer prices of 2017 not much above long term average. In part, the relatively subdued prices can be attributed to the absence of extreme heat in southern Victoria so far this summer. The mean maximum daily summer temperature in Melbourne stands at about 27C, slightly below average of the previous five years. So far there have been no days with temperatures above 40C, compared to eight in 2014 and four in 2016.

The dominant factor in subduing the Victorian markets prices is likely to be the ongoing fall in demand. In the year to 18th February, demand in Victoria fell by 200 MW. This follows a persistent reduction in demand that has seen a fall of almost 500 megawatts over the last three years, equivalent to 9% of average demand. As shown below, the contrast with Queensland is stark, and reflects significant reductions in industrial demand stemming from the closure of the Point Henry aluminium smelter in August 2014 (Point Henry consumed up to 360 megawatts) and more recently the reduced demand from the Portland smelter on the back of damage caused by an unscheduled power outage on December 1st, 2016. While power capacity in Victoria was reduced by the closure of the 150 megawatt Anglesea coal-fired power plant in August 2015, the cumulative demand reduction over the last decade has led to substantial capacity overhang. All that is set to change with the closure of the 1600 megawatt Hazelwood power station, slated for the end of March.

The figures shown in the previous sections reveal that peak demand events are stretching the power capacity of the NEM in unprecedented ways, for a variety of reasons. The tightening in the demand-supply balance is driving steep price rises that, if sustained, will have widespread repercussions. For example, a $20/MWhour rise in the Queensland spot price translates to a notional annual market value of $1 billion, that must eventually flow through the contract markets. With summer prices already more than $100/MWhour above last year, the additional costs to be passed onto energy consumers may well tally in the many billions of dollars.

In South Australia, the market tightening follows substantially the reduced supply stemming from the closure of the Northern Power Station.

In Queensland, the market tightening is being driven substantially by industrial loads such as the new LNG gas processing facilities. To the extent that the LNG industry is a significant driver, it is a heavy excise to pay for the privilege of exporting our gas resource. The makings for a policy nightmare, should the royalties from our LNG export be outweighed by the cumulative cost impacts passed on via our electricity markets.

It is important to note that the electricity market is designed so that prices fluctuate significantly in response to the normal capacity cycle, as capacity is added to or removed from the market following rises and falls in demand. In small markets, such as South Australia, the spot price fluctuations over the capacity cycle can be extreme, because the capacity of an individual large power plants can represent a large proportion of the native demand.

Although not large in terms of total capacity by Australian standards, Northerns 520 megawatt power rating represented around 40% of the South Australias median demand. That made Northern one of the Australias most significant power stations in terms of its regional basis size. Its withdrawal has dramatically and abruptly reduced the capacity overhang in South Australia. Spot prices were always going to rise as a consequence, because that is the way the market was designed. In addition, Northerns closure has also increased South Australias reliance on gas generation, and it has concentrated market power in the hands of remaining generators, both of which have had additional price impacts beyond the normal market tightening.

In both Queensland and South Australia, the rises in spot prices is signalling the growing tightness in the market. Under normal circumstances that should serve to drive investment in new capacity. The lessons of Northern show that any new capacity in South Australia will need to be responsive to the changing pattern of demand, unless the market rules are changed.

Further, both regions have questions about the adequacy of competition. Both are sensitive to the impacts of parallel developments in the gas markets, which have made gas-fired power production much more expensive in recent times. In the case of Queensland this is greatly exacerbated by the extra demand from the LNG gas production facilities. Finally, these insights have importance for predicting how the markets the will react to the impending close of the 1600 megawatt Hazelwood Power Station in Victoria, all topics I hope to consider in following posts in this series.

Link:
The anatomy of an energy crisis a pictorial guide, Part 2 - The Conversation AU

Syrian Prison Executions Anatomy of a Smear Campaign – Antiwar.com

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Syria has long been a pebble in the shoe for America, unwillingly to get with the program. Recalcitrant, stubbornly independent. Hafez al-Assad, father of current president Bashar al-Assad, founded modern-day Syria as a secular state back in 1970. His biggest mistake (in the U.S. book) was to side with the Soviet Union. Fast forward to 2011 and his son Bashar is in power. The country is in the throes of a CIA-backed insurgency. Islamist extremists of every extraction, not to mention ISIS, with the common goal of replacing al-Assad with an extreme form of Sunni Islam. Everyone armed with American weapons supplied directly by the US or indirectly through Saudi Arabia, Qatar, Turkey and others.

Branded a threat to national security, Syria has since been the target of a massive, relentless disinformation campaign orchestrated at multiple levels in the US Threats had to be dealt with, which meant the US government needed total, uncompromising public support. What better way to get that support than to depict your enemy as a sadistic, barbaric dictator? After all, he kills children! Any normal human being would get on the band wagon, hating the enemy on a visceral level.

The smear campaign against Syria in general and Bashar al-Assad personally has been ongoing for years. Weve seen nothing but horror stories come out of Syria. Allegations of chemical weapons, barrel bombing of civilians, terrible crimes against humanity. Were seldom presented with evidence, yet the headlines stick in our minds. Its not whats true, its what people believe, and headlines are great indoctrination tools. Who cares about proof anymore? If the government says it true, it must be true.

The smear machine is again in high gear, with reports of mass executions in a Syria prison accompanied by ghastly headlines such as:

We can react with nothing but horror, wondering how the world can allow such things to happen. We all want President Bashar al-Assad, known in the press as Syrias henchman or more affectionately the butcher of Damascus, to be brought to justice. Who wouldnt? In practical terms, this means regime change, which has long been the American objective. Interventionism.

What a happy coincidence that the Syrian prison stories happen to support American foreign policy objectives! The reason is obvious to some: the enemy of your friend is your enemy. Syria is an enemy of the Saudis, who are Americas best friend. No foreign country has more control of the US government than Saudi Arabia.

The mass media stories on Syrian prison exterminations conjure up images of people tortured to death in dark, dingy rooms. They turn our stomachs. They cry out for justice.

If only they were true.

If my mother taught me anything, it was "dont believe everything you read". Mothers sometimes have good advice, so lets look at the stories more carefully to see if they merit our belief.

The first thing that strikes one is the sensationalist tone. Huge numbers, if inconsistent. CNN goes so far as to give us an exact total: 17,723. A solid, mathematical fact. How they reached that figure isnt important, right? Then we have gruesome depictions such as "exterminations" and "slaughterhouse". Words that will make readers cringe and draw inevitable conclusions even before reading the articles. The headlines say it all.

In a court of law, one would immediately demand proof. Where is the evidence? The fact that all the stories first appeared in August 2016 is interesting. As it turns out, theyre all based on a single report published by Amnesty International.

On the surface, the report is formatted to look like a scholarly paper, with footnotes, dates, methodologies, procedures. All very impressive to the layman. One might realize it departs from a scholarly premise by its title. "Human Slaughterhouse. Mass Hangings and Extermination at Saydnaya Prison, Syria". Provocative, deliberate, even juicy. A truly scholar paper would have been titled something less charged, like "Executions in Syrian Prisons: A Study". Objective, detached, scientific. But Amnestys purpose wasnt to present facts but rather to sway opinion, and at the highest levels: The US Congress, the US courts, the US presidency, the United Nations, not to mention the western public in general.

In the report, Amnesty states (paragraph 5 on page 6) that that "between 5,000 and 13,000 people were extra judicially executed at Saydnaya between September 2011 and December 2015". Evidence please? You have to dig down to paragraph 2 on page 17 to get some justification.

"People who worked within the prison authorities at Saydnaya told Amnesty International that extra judicial executions related to the crisis in Syria first began in September 2011. Since that time, the frequency with which they have been carried out has varied and increased. For the first four months, it was usual for between seven and 20 people to be executed every 10-15 days. For the following 11 months, between 20 and 50 people were executed once a week, usually on Monday nights. For the subsequent six months, groups of between 20 and 50 people were executed once or twice a week"

Lets break everything down.

And what to say about recent reports of a crematorium inside the Saydnaya prison grounds? Weve seen the headlines. Heres one from the Washington Post:

US says Syria built crematorium to handle mass prisoner killings. May 15, 2017.

How terrible! Another outrage from that savage al-Assad. The article opens with a flat statement. "The Syrian government has constructed and is using a crematorium at its notorious Sednaya [Saydnaya] military prison near Damascus to clandestinely dispose of the bodies of prisoners it continues to execute inside the facility", the State Department said Monday.

A statement of certainty: "The Syrian government has constructed and is using a crematorium". No ifs ands or buts about it. Crematorium built and in use. Done. Fact.

The onslaught of worldwide stories about the Syrian crematory should lead to a question: Why is it that reports of this crematorium suddenly exploded on the global scene? Was the crematorium just built? No, according to Washington. With a little digging, we discover that all the stories are tied (again) to a single source: a newly declassified satellite image of Saydnaya prison. The picture was published worldwide. Click here for the New York Times story.

The alleged crematorium is not new at all. The claim for its existence stems from a 2015 spy-satellite winter photo, showing all the prison buildings covered in snow except one. Thats it. No other proof. Not even a single witness, alleged or otherwise. The logic is simple: no snow, ergo crematorium. It goes without saying that the explanations for a building not having snow on it are many, none of which have anything to do with crematoriums. And why would a crematorium NOT have snow? Its not like the interior of the whole building is somehow overheated, melting snow clear through the roof. Crematoriums use simple gas-operated furnaces and vent their hot exhaust through a chimney. The building doesnt change temperature as a whole. A more telling intelligence photo might have been a false-colored thermal camera image showing an unusually hot exhaust plume from the buildings chimney. To be burning the number of bodies claimed, the plume would have been substantial. No such evidence. But there was no snow on the roof.

There are two particularly interesting facts about the crematorium story:

The public has become accustomed to media and government stories peddled without evidence, playing on shear emotion. The pseudo-journalists of today are heavy on accusations and light on facts, especially when dealing with perceived foes of the United States. Were all still waiting for the evidence about Russias tampering with the US elections, Russias hacking of the Democratic National Convention servers, Russias secret ties with Trump. Given whats at stake, if evidence existed it wou
ld have been presented long ago, and the massive US smear machine would have had a field day.

Edmund "Ted" Faison is a software architect living in Southern California. With an electrical engineering degree from California State University, Fullerton, he has published several books on computer and software technology. He also writes fiction. Having once lived in Europe, he developed a keen interest in international affairs, with special emphasis on American foreign policy.

Read more here:
Syrian Prison Executions Anatomy of a Smear Campaign - Antiwar.com


  1. Anatomy