Issues with AEMO Forecasting, Part 1

The AEMO does a lot of modelling of the NEM, to assess such things as the adequacy of the future generating capacity to meet peak demands, and of the transmission system to cope with new and lost generators. A key quantity in the modelling is the expected maximum demand, and this post deals with how AEMO joins its estimates to the latest actual maximum demands, as shown in the following figure from the 2016 South Australian Electricity Report (SAER):


It appears that AEMO are assuming that the last two actual maximum demands (from summers 2014/15 and 2015/16) are somehow “average” levels of maximum demand. There are no references to any attempt to correct the actual maximum demands for demand reductions due to weekends/holidays or for heatwave severity.

I have examined the daily peak demands, temperatures and weekend/holiday dates for each summer from 2004/05 to 2015/16 and found that each summer can be assigned to one of two classes:

  • Class A: A major heatwave was unaffected by weekends/holidays
  • Class B: There was no major heatwave falling on working days

Examples of this kind of analysis are given in the previous two posts. The results for all years examined are shown in the following figure, showing Class A summers with black markers, and Class B ones with purple markers:


The following figure shows the same data in a different way:


The figure above suggests to the author that AEMO demand forecasting may be flawed by its failure to take account of weekends/holidays and of the variability of heatwave severity. The bottom line is that AEMO may be underestimating future maximum demands.

Circumstantial evidence for the prosecution lies in the fact that Queensland recently recorded its highest ever maximum demand, despite the proliferation of solar panels, increasingly efficient appliances and ever higher prices, all of which are meant to reduce demand:

The record breaking Queensland heatwave culminated on a working day, and it may be that by chance this has not happened there for several years.


Maximum demand may not be as low and falling as fast as AEMO are assuming, and in fact may not be falling at all, casting doubt on claims by AEMO that system capacity is adequate over the next several years. There are other issues with AEMO modelling, also connected with system capacity, to be covered in future posts.

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