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Prime Minister Anthony Albanese has urged energy companies to meet their responsibilities to customers, as the threat of blackouts along the east coast continued on Wednesday.
It came amid another day of power shortages for the east coast states, and as South Australia’s Premier said policy makers should be “deeply ashamed” of the ongoing crisis.
Peter Malinauskas said Australia was witnessing a “market failure on a grand scale across the National Electricity Market” that was occurring “in a way that I think a range of policymakers should be deeply ashamed of”.
“The simple fact is that we’re in a first world country that is energy rich, and the fact that we’ve now got Australians being told that they should turn off porch lights to keep the system going. I think is somewhat of an embarrassment,” he said.
The Australian Energy Market Operator has warned that South Australia faces potential rolling power cuts on Friday as there is no reserve left in the national electricity grid.
On Wednesday morning, it signalled it was anticipating an energy supply crunch in South Australia on Friday from 8-9.30am and 5-9.30pm, issuing a “Lack of Reserve Level 3” (LOR3) notice.
There were similar warnings for NSW and Queensland for Wednesday.
A LOR3 notice means that “available electricity supply is equal to or less than the operational demand”.
AEMO electricity shortfalls in Queensland and NSW overnight but said it was able to avoid blackouts by intervening to direct generators to bid into the market.
AEMO has been working with the sector to ensure enough power is also available to avoid load shedding in Victoria.
The federal government said on Wednesday it had been advised blackouts would likely be avoided, despite the pressure on the power system.
Energy Minister Chris Bowen said he was pleased significant load-shedding and blackouts had been avoided so far, as a cold snap, the temporary shutdown of some coal-fired power station units and high gas prices had stretched the system.
“AEMO advises me that that will likely continue to be the case that we will be able to avoid any load shedding events or any blackouts,” Mr Bowen said in Gladstone on Wednesday.
“Of course, that is subject to any unexpected outages in the system … which is under pressure.”
Mr Albanese, meanwhile, warned providers who were seeking to game the system by shutting down generation when prices were capped by regulation.
“They have a responsibility to their customers, whether they be households or businesses, to do the right thing,” he told ABC Radio.
“If they’re not doing the right thing, the regulator will take appropriate action.”
AEMO has directed generators to put more than 5000 megawatts into the market. Mr Bowen said he had made it clear the government supported “any action [AEMO] chooses to take to effectively manage the situation in the best interests of Australian consumers, whether they be big industrial consumers or residential consumers”.
Australian Energy Regulator chair Clare Savage said there would be talks on Wednesday to ensure there was enough power supply.
Despite shortages in some of the market, Ms Savage said generators were doing everything they could to keep the power running.
“Supply is very tight right now, but we do know there is more generation available that is being bid into the market,” she told the Seven Network.
“The Australian Energy Market Operator is working around the clock with generators to make sure we have enough supply to keep the lights on.”
Ms Savage said she wrote to every generator in the east coast on Tuesday to make sure they understood their responsibilities.
“We saw the situation evolve over the weekend where there was a price cap put into the wholesale market and a number of generators who said they were available suddenly withdrew their capacity,” she said.
“We wanted to be quick off the mark to communicate with these generators to put them on notice and make sure they understand their obligations.”
Mr Malinauskas said Australia’s energy market structure was broken. He said his state was spending $600 million on a hydrogen power plant to stabilise energy supply.
“We are witnessing market failure on a grand scale,” he said.
In a statement on Wednesday morning, the market operator said it would encourage energy generators in the eastern states to bid for availability into the energy market, rather than direct them to.
“Wholesale electricity prices remain capped in Queensland, NSW, Victoria and South Australia due to wholesale prices reaching the cumulative high price threshold,” the statement said.
Australian Energy Council chief executive Sarah McNamara said the current crisis in the sector was unprecedented.
“It’s very challenging for generators to be expected to bring supply online,” she told ABC Radio.
“It’s costing them $400/MWh. If they’re only going to get paid $300/MWh, that’s running at a deep and significant loss.”
-with AAP
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