Australian power crisis eases as coal-fired plants crank up (updated)
17/06/2022 02:16
* Power supply sufficient to meet weekend demand
* 1,900 MW of coal plant restarts since Wed
* 'Challenges remain' market operator says
(Adds link to graphic, detail on new planned outage, impact on
users)
By Sonali Paul
MELBOURNE, June 17 (Reuters) - Blackout risks eased in
eastern Australia on Friday as about a third of the coal-fired
generation that had been offline in recent weeks returned to
service, but the market operator said the power crisis was not
over.
"The Australian Energy Market Operator (AEMO) can confirm
sufficient electricity supply can be made available to meet
forecast demand over the weekend across all regions in the
National Electricity Market," the operator said in a statement.
Australia's heavily populated east has faced a power crunch
since mid-May as around 25% of the market's 23,000 MW of
coal-fired capacity has been off line for maintenance or
unplanned outages, exacerbated by coal supply disruptions and
soaring global coal and gas prices. urn:newsml:reuters.com:*:nL1N2Y404D
To staunch the crisis, the market operator on Wednesday took
the unprecedented step of taking control over power supply and
pricing by suspending the national electricity market.
"Challenges remain in the energy sector and AEMO will
continue to monitor supply levels and risks across all regions,"
it said.
Coal-fired generators have brought 1,900 megawatts (MW) of
capacity back on line since Wednesday, the Australian Energy
Council (AEC), which represents generators said, easing blackout
risks that plagued the market this week.
EnergyAustralia, owned by CLP Holdings 0002.HK , said it
will take a unit down for repairs on Friday at its Mount Piper
coal plant in New South Wales, aiming to bring it back online
early next week.
Prime Minister Anthony Albanese backed the market operator's
intervention in the market, telling the Australian Broadcasting
Corp on Friday it had been necessary because there had been "a
bit of gaming going on in the system".
Some observers suggested generators had deliberately
withheld power, aiming to benefit from market rules that they
can be compensated for any output sold below operating costs if
later directed by the operator to supply power.
"There is a widespread view that this withdrawal is related
to generator profiteering around different forms of available
compensation. The AEC rejects that view," AEC Chief Executive
Sarah McNamara said in a statement.
She said generators with limited fuel or water stocks and
large-scale batteries with limited energy reserves were being
dispatched in ways that meant their energy reserves would
rapidly run out and threaten bigger problems down the track.
To prevent that happening, generators and large-scale
batteries had to be removed from the normal dispatch process,
she said.
While big manufacturers and miners typically have long term
power contracts at fixed prices, some, including top building
materials maker Boral Ltd BLD.AX , a big gas and power user,
have already issued profit warnings partly due to soaring energy
prices. urn:newsml:reuters.com:*:nL3N2XA01U
Smaller businesses that rely on spot gas and power markets
are suffering much more. Some smaller gas and electricity retail
businesses have been forced to shut, including gas seller
Weston Energy, which supplied 7% of the eastern Australian
market. A regulator shifted its customers to No.3 energy
retailer EnergyAustralia. urn:newsml:reuters.com:*:nL2N2XG07J
"While access to firm and affordable gas from producers is
problematic at this time, EnergyAustralia continues working with
each of these customers to ensure they are provided the gas
needed to run their business," EnergyAustralia said on Friday.
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(Reporting by Sonali Paul; Editing by Muralikumar Anantharaman
and Lincoln Feast.)
((Sonali.Paul@thomsonreuters.com; +61 407 119 523;))