The Australian energy market operator has warned of a possible downturn in Australia’s most coal-dependent states: Queensland on Monday and NSW on Tuesday, due to a lack of supply or, more specifically, a lack of supply. of will to offer supply under the new tax. price limit.
The announcement of possible forced interruptions came just hours after the market operator extended its maximum price for a second consecutive trading day after prices in Queensland breached the $ 1.359 billion trigger point during the previous seven days.
The deepening of the crisis came when a quarter of Queensland’s coal capacity remained on the sidelines due to maintenance and unexpected disruptions, and a number of gas and diesel generators were also out of order. In total, just over half of the state’s registered capacity is being made available.
AEMO says the risk of a load spill worsened because some gas and diesel generators were not interested in providing power below the price limit. You can take steps to force them online.
If the deficit occurs, it will occur in the early evening, as the state’s solar generators run out and while the market operator struggles to get enough operational thermal capacity to keep the lights on.
He later marked an intervention under his reserve trader mechanism, which could include demand management, rather than forced interruptions.
AEMO initially said that the load could have to be reduced to 173 MW between 1730 and 1900 AEST. It quickly upgraded it to a potential deficit of 513 MW, or the equivalent of a quarter of Brisbane’s total demand, according to WattClarity analysts.
Shortly before noon, AEMO raised the potential drop in load to 1454 MW, approaching the energy needs of a large city like Brisbane. He later reduced it to 800 MW, before it was called the RERT mechanism.
In NSW, the situation was a little better, with multiple disruptions in Liddell and Bayswater. At around 1pm, AEMO warned of an LOR3 in NSW also on Tuesday evening, with a potential discharge of up to 409 MW between 6pm and 11pm local time.
In a statement, AEMO said that generation had been reduced and withdrawn in Queensland as a result of the price cap administered on Sunday and that it was extended until Tuesday morning, raising the question of whether this included proprietary generators. dominating the Queensland market.
“AEMO has seen a reduction in generation bidding and has issued non-reserve warnings (LORs) in both Queensland and New South Wales, indicating a reduction in default electricity reserve levels,” AEMO said in a statement. press release.
He said he had already been forced to order some generators to continue to meet consumer demand to improve booking conditions and would continue to do so. But you may not be able to force enough capacity to avoid “downloading” later in the day.
Some energy experts suggested it could be a deliberate move by generators to retain capacity because the rules on payments below a price cap are unclear. However, if a generator is “directed” to work, there is more clarity.
One of the problems is that no gas generator can produce energy profitably below the price limit given the current price of the gas market, which requires more than $ 400 / MWh, just to reach equilibrium.
And the situation may not be resolved quickly. Prices have been so high in Queensland that the administered limit may need to be in place for a few more days, which raises the question of whether more indications will be issued.
Giles Parkinson is the founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder and editor of The Driven, which focuses on EV. Giles has been a journalist for 40 years and is a former business and assistant editor of the Australian Financial Review.