Australia’s energy market operator will lift the unprecedented suspension of trading on the electricity market after it confirmed that the “risk of any shortfall has reduced markedly”.
The east coast electricity system was thrown into chaos last week forcing the Australian Energy Market Operator (AEMO) to seize control of the market for the first time in its history to stabilise power supplies and avert intensifying threats of blackouts in multiple states.
Federal Energy Minister Chris Bowen says challenges remain in the electricity market. Credit:Rhett Wyman
Many power generators said they could not remain viable under restricted caps which AEMO had imposed on the wholesale prices they charged customers, prompting them to withdraw offers to supply electricity.
But supply has come surging back, with around 4000 gigawatts, or about one-fifth of the electricity grid’s average demand, coming back online in the past week following the withdrawals, planned outages and some technical failures at coal-fired power stations.
AEMO chief executive Daniel Westerman said on Wednesday generators had been working hard on resolving the crisis and a “step by step” exit from the suspension would begin early on Thursday morning.
“We are activating a staged approach to lift the suspension of the electricity market,” he said.
“The first step will take place at the end of the trading day today and that is 4am tomorrow morning [Thursday] when we will allow the market to set the price again. The second step will happen 24 hours after that, when we will be able to formally lift the market suspension.”
Federal Energy Minister Chris Bowen said a return to normal was within reach but challenges remain.
“What the chief executive has outlined today is, I think, a prudent and carefully managed approach to return to more normal market conditions,” Bowen said.
“Risks remain in the system and I know that AEMO remains vigilant about what needs to be cared for in the coming days.”
AEMO on Monday noted that energy market conditions remained “dynamic” and it would continue to monitor reserves across the eastern seaboard.
Power giant AGL has restored two units at its Bayswater power plant in NSW, while a third unit that has been under maintenance since March was due back in early July.
EnergyAustralia, the nation’s third-largest generator, has returned two units at its Mt Piper station following maintenance works over the weekend.
The company’s Yallourn coal-fired power plant in Victoria has three generating units operating, but the planned return of its fourth unit has been delayed until “late next week”.
EnergyAustralia managing director said the company was doing all that it could to make generators available to provide supply into the system.
“Our gas-fired fleet across Australia, which at this time of year would normally come online to meet a supply shortfall, is running seven times the volume compared with the same period last year,” he said.
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