The Australian Federal Energy Market Operator (AEMO) has suspended the operation of the spot electricity market in the country amid a sharp increase in energy prices, SBS TV channel reported citing a statement from the organization.
AEMO said in a statement that the operator “paused the spot market in all regions of the country from 2:05 pm ET on June 15.”
“We have taken this step because it has become impossible to continue to operate the spot market while providing a safe and reliable supply of electricity to consumers following national standards and regulations,” said AEMO CEO Daniel Westerman, noting that on Thursday night five GW of electricity were redirected to needy regions “through direct interventions”.
“In the current situation, the suspension is the best way to ensure reliable power supply to homes and businesses,” he said.
Westreman noted that “the situation that has developed in recent days has threatened the entire energy industry of the country,” however, he is convinced that electricity prices will be able to stabilize and “the suspension of the market is temporary.”
AEMO cited problems in the coal and gas supply chain as the main reason for the sharp rise in electricity and energy prices. “The current energy problem results from a combination of several factors. A large number of power units were taken out of service for scheduled maintenance, in addition, periods of a decrease in the amount of energy received from wind turbines and solar panels were recorded,” the organization said, noting among the reasons also unexpectedly the early arrival of winter on the continent and the onset of cold weather.
This is the first complete suspension in the history of the single national energy market, which began its work in 1998.
Earlier, AEMO reported a significant increase in wholesale electricity prices in the national electricity market. As the operator noted, in the first quarter of 2022, they increased by an average of 67% to 87 Australian dollars ($62) per MWh due to increased demand, outages in coal-fired power plants, and high fuel costs for electricity generation.
Over the past 12 months, the wholesale price of electricity in Australia has increased by 141%, noted in AEMO, indicating among the reasons for the sanctions imposed by many countries against Russia, which is a major player in the global energy market.