AEMO suspends electricity market

The AEMO has suspended the spot market across the entire National Electricity Market (NEM) in a week plagued by threatened outages due to tight supply. The market operator said it had taken this step because it had become impossible to continue operating the spot market while ensuring a secure and reliable supply of electricity for consumers in accordance with the National Electricity Rules. Chief executive officer Daniel Westerman said AEMO was forced to direct five gigawatts of generation through direct interventions on Tuesday, and it was no longer possible to reliably operate the spot market or the power system this way. “In the current situation suspending the market is the best way to ensure a reliable supply of electricity for Australian homes and businesses,” he said. “The situation in recent days has posed challenges to the entire energy industry, and suspending the market would simplify operations during the significant outages across the energy supply chain.” Mr Westerman said price caps coupled with significant unplanned outages and supply chain challenges for coal and gas, were leading to generators removing capacity from the market. He said this was understandable, but with the high number of units that were out of service and the early onset of winter, the reliance on directions has made it impossible to continue normal operation. AEMO described the current energy challenge in eastern Australia as the result of several factors across the interconnected gas and electricity markets in recent weeks: - A large number of generation units out of action for planned maintenance - a typical situation in the shoulder seasons. - Planned transmission outages. - Periods of low wind and solar output. - Around 3000 MW of coal fired generation out of action through unplanned events. - An early onset of winter - increasing demand for both electricity and gas. “We are confident today’s actions will deliver the best outcomes for Australian consumers, and as we return to normal conditions, the market based system will once again deliver value to homes and businesses,” Mr Westerman said. The peak body for energy retailers and generators, the Australian Energy Council said it understood and supported AEMO decision to immediately suspend the wholesale market temporarily in order to reset it. AEC chief executive Sarah McNamara said, “It is quite clear that in these unprecedented circumstances and following the application of the Administered Price Cap the power system was becoming unmanageable. “We hope the conditions improve in this new phase and we can soon return to an uncapped market.”

AEMO suspends electricity market

Industry Queensland

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