Australian energy market operator to lift market suspension this week

  • Power shortfall risk has ‘reduced markedly’ – operator
  • Market bids to resume from early Thursday
  • Market suspension to be lifted on Friday at the earliest

MELBOURNE, June 22 (Reuters) – Australia’s energy market operator said on Wednesday it would lift its unprecedented suspension of the spot electricity market in stages, starting on Thursday, as a return of some coal-fired generation eased the country’s power crisis.

The market operator last week capped wholesale prices and had to force generators using gas and diesel to supply power, even at loss-making prices, to fill a gap from coal-fired generation to avert blackouts.

Around 25% of the market’s coal-fired capacity has been offline over the past few weeks due to planned maintenance and unplanned outages due to technical faults, leading to shortfalls as demand spiked due to a cold snap, while prices rocketed due to soaring gas and coal prices. read more

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On Wednesday, the market operator said generators were gradually restoring output to more normal conditions.

“We have seen nearly 4,000 megawatts of generation return to service since this time last week, and that means the risk of any of shortfall has reduced markedly,” Australian Energy Market Operator Daniel Westerman told reporters at a televised media conference.

“I have said that we will not keep this market suspended for a minute longer than is needed and today, I can confirm that we are activating a staged approach to lift the suspension of the national electricity market,” he said.

From 4 a.m. (1800 GMT) on Thursday the market operator said it would allow generator bids to set the price again.

The operator would then monitor the market for at least 24 hours before making a decision to formally lift the market suspension, Westerman said.

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Reporting by Sonali Paul; Editing by Christian Schmollinger and Richard Pullin

Our Standards: The Thomson Reuters Trust Principles.

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