The South Australian government says the state should not suffer any power outages today, although the market operator has previously warned of possible disruptions.
Key points:
- Australian market power regulator had forecast a deficit in reserve power supply to states such as SA
- The SA government says the state will likely avoid any power outages
- But Energy Minister Tom Koutsantonis says the energy market is broken
Power outages have been hanging across the country this week amid the national energy crisis.
Energy Minister Tom Koutsantonis was Minister of Energy in 2016 when SA suffered a statewide shutdown and when power outages were ordered in 2017 to secure the grid in the middle of summer.
Although warnings from the market operator gave many South Australians a flashback at the time, Koutsantonis said the current situation was different.
This time, the forecast deficit is expected due to the fact that the generators withheld the supply after the operator of the Australian energy market (AEMO) put a price cap on the wholesale price of the electricity in some states, including South Australia.
In addition, some east coast coal-fired power plants have been taken offline for maintenance.
South Australian Energy Minister Tom Koutsantonis is confident the state will prevent blackouts in the midst of the national energy crisis. (ABC News: Lincoln Rothall)
But the AEMO can order privately owned generators to switch back on when needed, which means South Australia should avoid shutdowns.
Koutsantonis said some companies were taking advantage of the fact that AEMO paid compensation when they ordered the generators to shut down.
“Because AEMO has put in place price controls, they are now deliberately withdrawing their supply in order to be targeted so that they can make more money,” he told ABC Radio Adelaide.
“Now in anyone’s language, no matter your policy, this is not a market.
“This system has failed and is failing South Australians, and it is failing the whole nation.”
Koutsantonis said that while generators and retailers acted in the best interests of their shareholders, a general change in the system was needed.
“All the players are acting rationally under the rules, but when you look at the rules collectively it’s a fiasco,” he said.
Security power not available
After the blackouts in 2017, the then Labor government bought diesel generators to reduce the risk of power outages in the summer.
They were privatized by the former Liberal government when it took office.
The state government says that this decision means that it cannot access it during this current period of uncertainty.
“They [the former Liberal government] signed a contract with this new privatized entity so that it is only available for emergency responses in the summer, “Koutsantonis said.
Opposition spokesman Stephen Patterson. (ABC News)
“It’s winter now, we don’t have access to those 250 megawatts.”
Opposition spokesman Stephen Patterson defended the decision to privatize the generators.
“They’re available on demand when needed … and they work at other times to reduce the cost of electricity,” Patterson said.
He again criticized the state government’s decision to cut renewable energy programs in its recent budget.
“We are left with a serious case of rising prices, forecasts of blackouts and no short-term plans by the Labor government,” he said.
Legislation is needed to improve transparency
Koutsantonis said some generators would have secured the gas supply below the existing market rate, but were charging for energy based on current prices that have skyrocketed.
He said the state government was introducing legislation to improve system-wide transparency and allow regulators to see the details of the contract.
“All we want to know is how much gas you have stored in your pipes, [and] how much did you pay for it? ”he said.
“So when you put it in your gas power plant, we know exactly how much you should charge to get a return.”
Any legislation should be agreed by all other jurisdictions, but Koutsantonis said he believed the national desire to solve the problem was “strengthening every minute.”
“I think last night was probably the saddest chapter in the history of the Australian energy market,” he said.
“The idea that Australian generators, which buy Australian gas and fuel, are not bidding on the market to offer their energy to Australian customers is a national disgrace.”
Posted 2 hours, 2 hours ago, Wednesday, June 15, 2022 at 4:32 AM, last updated 1 hour, 1 hour ago, Wednesday, June 15, 2022 at 5:39 AM