A spokeswoman for Origin Energy said the company had several units in Queensland, NSW and Victoria that had responded to AEMO’s call to increase energy supply.
“In terms of managed prices, some power plants may not go on the market because it is not economical to operate them due to the availability of fuel and high costs; however, these plants remain available to be requested by AEMO if required to support the reliability of the supply to the market, ”he said.
“Generators targeting reliability can claim cost-based compensation.”
Mrs. Savage of the AER criticized generators seeking to avoid the compensation process that applies in a limited price situation in favor of the AEMO compensation process that applies when the market operator orders the plants to operate. , and which is understood to be more expensive for consumers.
“As you know … market participants must not cause any action or omission, whether intentional or reckless, or contribute significantly to the circumstances that cause an order to be issued, without reasonable cause,” he wrote.
Following talks with generators on Tuesday afternoon, AEMO estimated that there were about 2,000 MW of generation available in each of Queensland and NSW that have not been offered on the market. It “continues to encourage” generators to provide capacity to the market given the “level three” shortcomings in generation capacity, the most serious level, expected in all regions of the NEM on Wednesday.
He narrowly avoided a Queensland-like strait on Monday.
Grattan Institute energy program director Tony Wood said the price-controlled situation in four states showed that the current national electricity market was “broken.”
“It was a switch, like a commercial stop on the ASX, but now it’s all over the east coast of Australia,” Wood told The Australian Financial Review.
“This is a real mess. If you can’t fix it, the market isn’t working. You have to change the rules.”
Wood said Federal Minister of Energy and Climate Change Chris Bowen should intervene with the big gas companies and get them to launch gas on the market at a “fair and reasonable price,” such as $ 10 or $ 12. the gigajoule, or would be taxed at a reasonable price. a price determined above that.
“The only way to really solve it is to sit down with the companies and find out what’s going on. They’re making a lot of money,” he said.
A spokeswoman for Origin noted the call from CEO Frank Calabria to reconnect coal plants to remove pressure from the system.
“As we have consistently said, the fastest way to stabilize the East Coast power markets is to get the maximum capacity of coal-fired power plants back online as soon as possible, which includes supporting coal supply. to power plants that need it, “he said.
AEMO estimated the maximum amount of load that could be “shut down” to 1789 MW at 6.30pm in Queensland, with shortages lasting from 4.30pm to midnight.
In NSW, a maximum of 1748 MW could be “interrupted” at 9pm on Tuesday, but reaches 3166 MW at 8pm on Thursday.
“Hmmm … this isn’t a small number of MW predictions that will be downloaded to QLD or NSW on Tuesday evening, June 14, 2022,” tweeted Global Market Observer Paul McArdle. -ROAM. “Hopefully it works like it did on Monday night!”
However, Mr Bowen said AEMO had told him it had done enough to make sure there would be no downloads or shutdowns in the next few days.
“AEMO is working hard with the generators to make sure we can avoid the load drop, and according to their advice, I’m pretty sure we can,” Bowen told Radio National on Tuesday earlier.
He said many generators were waiting to be instructed by AEMO before they could hit the market and then be compensated, which he admitted was not a “perfect system”.
“We’ve had a poorly managed transition and now we’re paying the price for it,” he said.
Controlled prices are imposed when the total five-minute trading intervals in the NEM over the past seven days in a particular region exceed the established threshold of $ 1.3591 billion.
This happened in Queensland on Sunday evening, in NSW around 6.30pm on Monday and in South Australia and Victoria later Monday night.
I play the compensation scheme
Dylan McConnell of the University of Melbourne said generation capacity also withdrew in NSW when it entered the $ 300 / MWh limit. “It looks like some generators are playing with the compensation scheme,” he said.
“The reality is that there is capacity there and it’s available, just waiting to be addressed.”
A similar pressure was warned on Monday, but forced shutdowns were averted after AEMO ran the plants into operation and negotiated emergency reserves, and Queensland Transmission Company Powerlink calls on customers to reduce usage.
Josh Stabler, CEO of Energy Advisor Energy Edge, said the structure of the cumulative price threshold made it more likely that the limit would be extended beyond the end of the week as generators withdrew capacity, increasing the wholesale “shadow” price of energy. this would apply if the limit had not been set.
“Generators are shipped with market results below their fuel cost, so they are encouraged to extract their capacity, or not bid, to avoid being shipped,” he said.
“This translates into higher shadow prices, which are included in the CPT calculation, and therefore extends its duration.”
Meanwhile, the $ 40 gigajoule controlled limit for natural gas in the Sydney market due to rising prices will end on Tuesday, while the Victorian price will remain limited at that level.