26.6 C
Colombo

The suspension of the power market in Australia will be lifted as prices fall

Published:

As the country’s power crisis eases, Australia’s energy market operator says it will lift the suspension of the country’s major wholesale electricity market.

Before a final judgment is made, the limitations will be lifted temporarily on Thursday.

Following a price spike, it took an extraordinary step last week and halted trading on the site.

Officials in the state of New South Wales also asked residents to conserve energy due to fears about power outages.

Sydney, the country’s largest metropolis, is located in the state, which has a population of roughly 8 million people.

The Australian Energy Market Operator (Aemo) stated in a statement on Wednesday that it had “seen a clear improvement in market circumstances” and that trade would restart at 04:00 in Sydney on Thursday (19:00 BST Wednesday).

It also stated that it would study the market for at least 24 hours before deciding whether or not to lift the suspension formally.

“We’ve seen approximately 4,000 megawatts of generation return to service since this time last week, which means the likelihood of a shortfall has significantly decreased,” Aemo CEO Daniel Westerman said during a televised press conference.

Australia is a major exporter of coal and liquefied natural gas, but it has been experiencing a power shortage since last month.

Three-quarters of its electricity is still generated using coal, and the country has long been chastised for not doing enough to reduce emissions by investing in renewables.

Coal supply issues, outages at multiple coal-fired power facilities, and rising global energy prices have all had an impact on the country in recent weeks.

Meanwhile, energy demand has risen as a result of the cold spell and the opening up of Australia’s economy following the removal of Covid-19 limitations.

All of this contributed to wholesale electricity prices exceeding the A$300 (£170; $208) per megawatt hour price cap imposed by Aemo.

Several generators, however, elected to withhold capacity because the cap was below their cost of production.

Aemo took the unprecedented move of suspending the market last Wednesday, announcing that it would set prices directly and compensate generators for the deficit.

Consumers in New South Wales were likewise encouraged to “temporarily decrease their energy usage.”

Mr Westerman claimed at the time that Aemo had “placed the grid’s security and keeping the lights on above all else.”

“We requested generators to bid their facility back into the system,” he explained, “and that is occurring more and more, giving us better real-time awareness of generation.”

Related articles

Recent articles