Prime Minister Anthony Albanian has accused energy producers of “playing” the system and taking advantage of the ongoing crisis that is expected to be a hot topic at Friday’s national cabinet meeting.
The Australian energy market operator took charge of supplying power generators to the east coast electricity grid for the first time this week until further notice.
It came after some generators withdrew from the market this week after AEMO capped rising power prices. The operators were then instructed to pump power into the network and were paid a fee.
Mr. Albanian said there are barriers built into the generator power market.
“There was a bit of gaming with the system, so AEMO used the tools at its disposal to intervene, so we have these short-term issues,” he said.
He had already indicated that he would try to rewrite the energy market operation rules to avoid repeating this week’s crisis when energy producers withheld supplies while waiting for the compensation trigger.
After days of impending power outages in NSW, state treasurer Matt Kean has been given emergency measures to ensure energy supplies in the state.
The risk of outages and the routine maintenance of the power station has repeatedly put pressure on NSW’s energy supplies this week, with Mr. Kean urging residents on Wednesday to cut use, fueling fears of power shortages.
The blackout has also affected Queensland, the ACT, Victoria, and South Australia.
On Friday, NSW Prime Minister Dominic Perrottet confirmed that Mr. Kean had more power to intervene in the market to bolster the state’s energy supply.
The powers will reportedly allow the Perrottet government to force coal companies to fuel power generators.
“These are steps we have taken as a precaution,” Perrottet said in Canberra ahead of Friday’s state and territory leaders meeting with Mr. Albanese.
“These aren’t new approaches, we’ve done that in the past, and our advice now is that… he can direct if needed.”
The latest advice to the NSW government is that the state’s electricity system is stable, and reserve conditions will improve through Friday. They are also sound predictions for other states.
Asked about Canberra’s role in solving the crisis, Mr. Perrottet said that every state faces energy challenges, but the federal government must coordinate responses at the national level.
“The national cabinet certainly has a role to play,” he said.
Western Australian Prime Minister Mark McGowan told the ABC the East Coast should follow his state’s lead in introducing laws to force companies to hold some of the stock for domestic use.
WA introduced a mechanism in 2006 that required future gas projects to retain at least 15 percent of what they produced for local use.
If available on the East Coast, Mr. McGowan said similar laws could have averted this week’s crisis.
Victoria has also backed a domestic reserve, with the state’s energy minister, Lily D’Ambrosio, insisting that this week’s crisis was not a supply problem.
“AEMO has advised that we continue to have adequate energy reserves,” she said.
“It’s disappointing that energy generators may have been gaming the system… this behavior is unacceptable and will be investigated.”
Grid pressure is expected to ease from Friday to the weekend as more power units return online.
Mr. Kean warned on Thursday of another sticking point for NSW but said he remained cautiously optimistic. A large generator would be back online late Thursday.
“The delivery conditions will relax,” he said.
“At this stage, we are confident that there is enough spare capacity in the system to ensure that we don’t have to ask people to consider their options tonight.”
Federal Energy Secretary Chris Bowen has said AEMO’s decision to take over the market was the best option for households.