With soaring energy prices and supply issues plaguing much of the country’s east, New South Wales (NSW) Treasurer and Energy Minister Matt Kean has been granted emergency powers to intervene in the market to shore up energy supplies, enabling him to direct the state’s private coal generators to operate and add supply to the grid.
Kean met with NSW Governor Margaret Beazley late on Thursday to seek emergency powers giving him authority to direct coal and logistics companies to provide fuel to keep generators supplying energy for domestic use.
The move came after the Australian Energy Market Operator (AEMO) on Wednesday suspended the electricity wholesale spot market in the entire NEM until further notice. It is the first full suspension of the market since its inception in 1998.
Kean on Friday said it was unlikely that he would need to use the powers having received “very good news” from AEMO with the market operator indicating conditions in the state’s exhausted energy system were much better.
“AEMO have described the energy situation as much healthier and that’s good news,” he said.
“Generators that were offline have now come back online. We had a generator come online yesterday. That added 600 megawatts to the system that wasn’t there the night before”.
He said another generator was due to come online on Saturday, further bolstering reserve capacity.
Kean said the new powers would remain on stand-by in case there was an unexpected change to the situation, including issues with fuel security or logistical problems getting fuel to the site of generators.
“We want to make sure we’ve got everything in our tool kit to keep the system running and get through this period,” he said. “As I said, this morning’s update from AEMO gives me, and should give everyone, great confidence that we’re out of those difficult conditions that we saw earlier in the week.
“We’ll take advice from AEMO if we need to consider using them, but that’s not the advice … everything is looking much better than it was earlier in the week.”
Pressure on the grid is expected to ease from Friday and through the weekend, as more power units come back online.
AEMO said electricity reserves had improved but a number of generators were still offline and warned there were challenges due to fuel costs and sourcing issues.
Australian Energy Council (AEC) chief executive officer Sarah McNamara said on Friday coal plants were progressively coming back online and expected the market to soon stabilise.
“We are pleased to note that since Wednesday we have seen the return to service of some 1,900MW of coal plant previously under maintenance,” she said. “Generators are working around the clock to return more plant as soon as possible.
“After a period of re-stabilisation, the AEC expects the market to be able to successfully restart without the price cap in place.”
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