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The Australian Energy Market Operator (AEMO) has shared statements regarding energy shortfalls across several states and the surrounding complications.

In its most recent statement on 14 June, the AEMO announced further electricity price caps in Queensland, New South Wales, Victoria and South Australia reached a cumulative high price threshold of $1,359,100 (accumulated over seven days). This triggered an administered price cap of $300/MWh in accordance with the National Electricity Rules.

The price cap will remain in place at least until the end of the trading day (4am June 15), after which it will only remain in place if the cumulative price threshold is still exceeded. The market will be notified when the cap is lifted,” the AEMO said. 

New South Wales and Queensland were issued a forecast Lack of Reserve 2 and 3 (LOR2, LOR3) market notice for during peak energy period 5pm to 8:30pm (AEST) on 13 and 14 June.

As a consequence, some generators revised their market availability in New South Wales and Queensland for today. This has contributed to forecast supply shortfalls, along with generation units being offline for planned maintenance and repairs,” the AEMO said.

To maintain power system security and reliability, AEMO has directed some generators to continue meeting consumers’ demand to improve reserve conditions. At this time, there is no impact to consumer supply.”

The AEMO’s announcements lead to Powerlink, Chief Executive, Paul Simshauser, to ask Queenslanders to try and manage their electricity consumption. 

Mr Simshauser said by managing electricity consumption – especially in the evening and mornings – people can help to ensure that available supply is used in the fairest and most efficient manner across industry, the community and essential services.

“Community safety and wellbeing is important so only manage energy consumption if it is safe to do so,” Mr Simshauser said. 

Queenslanders can manage their electricity usage by:

  • Considering the number of rooms being heated by air-conditioners
  • Turning off computers, TVs and other household appliances in standby mode
  • Turning off your pool pumps and second fridges

Commercial businesses can manage their electricity usage by: 

  • Considering the amount of interior and advertising lighting used
  • Turning off water heating systems and urns, except for food and beverage preparation and cleaning
  • Turning off advertising lighting and any unnecessary exterior lighting

“By carefully managing electricity use at home and in your workplace, the community can help ensure that power system security is maintained in Queensland,” Mr Simshauser said.

What led to the energy shortfalls?

The AEMO’s factsheet on Lack of Reserve (LOR) notices said “power systems are built and operated with an extra level of reserve energy – a ‘buffer’ – available to assist with maintaining power system reliability for energy consumers” and impacts on available resources deplete electricity reserves.

Pre-determined reserves in Australia’s National Electricity Market (NEM) refer to the spare capacity to provide this buffer, over and above the level of electricity demand that is forecast at any given time. The AEMO has a number of processes and arrangements in place to mitigate risk to energy supply when the system is affected by LOR conditions.

Unplanned events can impact available energy resources. This might include a combination of extreme weather, natural disasters, high demand, generation or transmission outages, or critical infrastructure maintenance. These conditions may cause a depletion of electricity reserves.

LOR2 exists when the available electricity supply is equal to or less than the operational demand and allows the AEMO to power to direct generators or activate the Reliability & Emergency Reserve Trader (RERT). 

LOR3 refers to when there are no reserve supplies available. Controlled load shedding may be required as a last resort to protect system security and prevent long-term damage to system infrastructure.

Both Queensland and New South Wales have also seen the administering of a price cap of $40/GJ for the Sydney Short Term Trading Markets and Victoria Declared Wholesale Gas Market. 

More to come.

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