Why Following the NEM Misses Half the Peaks—and Half Your Revenue

In the high-stakes world of energy trading, many participants in the National Electricity Market (NEM) focus on forecasted peaks to maximize their revenue. At first glance, this strategy seems logical—monitor the market, anticipate spikes, and react accordingly. However, this approach can leave significant revenue on the table. The reality? Forecasting alone is far from foolproof. 

Recent data shows that relying on NEM forecasts can cause you to miss nearly half of the potential revenue from peaks. Here’s why, and how a fast-reacting price-based system, like Powston’s automated solution, ensures you hit every opportunity.

The Problem With Forecast-Driven Strategies

Forecasts in the NEM are inherently uncertain. While they use sophisticated models, they often fail to capture the full scope of real-time dynamics that influence price spikes. Here’s why:

1. Forecast Errors:
   Forecasting relies on inputs like weather, demand, and grid constraints. However, sudden changes—such as unexpected demand spikes or renewable generation dips—are difficult to predict with precision. This leads to missed peaks, where real prices soar beyond what forecasts indicated.

2. Lagging Response Times:
   Even if a forecast predicts a peak, traders relying on manual or semi-automated systems can experience delays. These delays mean they enter the market too late, missing the highest-priced intervals.

3. Missed Peaks = Lost Revenue:
   Peaks often last for just 5 to 10 minutes in the NEM, with prices skyrocketing past $1,000/MWh. Missing even one peak in a day could erase significant potential profits. Relying solely on forecasts leads to "hit-or-miss" trading instead of consistent performance.

Why Fast-Reactive Systems Are Essential

Unlike forecast-driven strategies, fast-reacting price-based systems operate in real-time. Here’s how Powston’s system ensures you never miss a peak:

1. Real-Time Price Monitoring:
   Powston’s system directly monitors real-time price signals, allowing for instantaneous responses the moment a peak is detected. No delays, no guesswork.

2. Automated Execution:
   With Powston, batteries and loads are programmed to react automatically based on price thresholds, eliminating human error or hesitation. Whether it’s discharging a battery during a peak or ramping down loads to avoid high costs, the system acts precisely when needed.

3. Adaptability:
   Unlike static forecasts, real-time systems adapt to the unpredictable nature of the NEM. If a spike occurs outside forecasted intervals, Powston’s code reacts immediately, ensuring you capture every revenue opportunity.

4. Proven Results:
   Data shows that while forecast-driven strategies miss nearly 50% of peaks, Powston’s price-based automation consistently hits them all. This translates to maximized revenue and more reliable performance.

The Case for Automation in the NEM

Energy markets are becoming increasingly volatile, with more renewable generation and demand variability than ever before. In this environment, relying on forecasts is a gamble you can’t afford to take. 

With Powston, you’re not just keeping up—you’re staying ahead. By using real-time data and automated decision-making, our system ensures you extract the maximum value from every price spike, no matter how sudden or unexpected.

If you’re serious about maximizing revenue in the NEM, it’s time to let go of forecasts and embrace the future of energy trading: fast-reacting price-based automation. With Powston, you don’t just see the peaks—you seize them.

Ready to Capture Every Peak?

If you’re tired of leaving money on the table, contact us today to learn how Powston’s automation can revolutionize your energy trading strategy. The peaks are waiting—don’t miss another one.