On 23 January 2025, the Australian Energy Market Commission (AEMC) published version 224 of the National Electricity Rules, which incorporates a jurisdictional derogation to support reliability in South Australia.
The AEMC has made a final rule to help secure South Australia’s electricity supply over the 2025 summer period, which allows two additional power stations to be considered as emergency backup power sources.
The temporary rule change enables the Australian Energy Market Operator (AEMO) to consider contracting Snuggery and Port Lincoln power stations (owned by ENGIE) in South Australia as emergency out-of-market reserves. This exemption from usual market restrictions will end on 31 March 2025.
The AEMC said that without sufficient backup electricity reserves, South Australia could face potential load shedding during severe cases of reliability shortfalls, particularly during extreme weather events. Such an outcome could severely impact households and businesses.
The commission made this one-off exemption due to a combination of specific factors:
- AEMO has identified worsening reliability risks for South Australia during summer 2025
- An insufficient response to AEMO’s tender for emergency reserves has increased load shedding risks
- Two power stations (Snuggery and Port Lincoln) were unavailable due to mothballing
While the commission said it remains committed to preserving the wholesale market as the primary means of ensuring reliability, this temporary measure is warranted given the unique combination of factors that exist.
The rule change was processed urgently with one round of stakeholder consultation. No objections were received to using this expedited process.
South Australian Energy Minister, Tom Koutsantoni, welcomed this decision from the AEMC.
“The State Government makes absolutely no apology whatsoever for moving forthrightly to secure appropriate backup generation that ensures there is consistency of supply in the event of a gas shortage,” Mr Koutsantoni said.
“I am glad the AEMC has agreed to our request to grant the South Australian Government authority to direct ENGIE to utilise two currently mothballed power stations at Snuggery and Port Lincoln if required between now and when the long-delayed interconnector to New South Wales comes online.”
