Power uncertainty spread across five states on Tuesday, with the Australian Energy Market Operator (AEMO) warning of possible power interruptions.
Market notices published on the AEMO website warned of maximum power load interruptions in Queensland, New South Wales, Victoria, South Australia and Tasmania.
This was forecast to impact Queensland from 5pm until 10:30pm and NSW from 5:30pm to 10:30pm, with further interruptions possible on Wednesday.
Potential power interruptions were forecast for Tasmania, South Australia and Victoria on Wednesday evening — but the notices relating to South Australia and Tasmania were cancelled later on Tuesday.
AEMO also released a statement on Tuesday afternoon saying supply shortfalls in NSW and Queensland would be met following discussions with governments, industry and generation owners.
"Discussions with scheduled generators indicate an estimate of approximately 2,000 megawatts of generation in each of Queensland and New South Wales, which hasn't bid into the market, can be directed by AEMO to be available to help meet forecast electricity shortfalls this evening," AEMO said.
It also said it would encourage generators to bid their availability into the market in order to avoid supply shortages on Wednesday.
Similar warnings from AEMO for Queensland on Monday afternoon were followed by another statement explaining that a market response demanded under National Electricity Rules had meant potential blackouts were avoided.
The cost of power has been rising so rapidly that AEMO stepped in to place a cap on the wholesale price of electricity in Queensland, NSW, Victoria and South Australia.
AEMO set the price cap for consumers at $300 a megawatt hour.
"As a consequence, available offers from generators reduced, contributing to a forecast supply shortfall," AEMO said on Monday.
Australian Energy Council chief executive Sarah McNamara said while the power crunch would ease eventually, there was no immediate solution in sight.
"One of the issues in the market is that a number of coal plants have had outages on the east coast of Australia, for unplanned maintenance," Ms McNamara said.
"Once they come back online in the next couple of months that should improve supply somewhat."
Alinta Energy executive director Daniel McClelland said power customers should be prepared to face higher prices.
"If we're going to be honest about this, it looks like these higher prices are going to persist for the next two years, if you look at what's happening elsewhere in the world," he said.
Andrew Stock from the Climate Council said Victoria and SA were better placed to weather any power shortfall because of the state's push towards renewable energy sources.
"Fortunately, some of the states like Victoria and South Australia have been getting on with it anyway and they are reaping some of the benefits, and now Queensland and New South Wales are playing catch-up as fast as they can," Mr Stock said.
Energy Minister confident lights will remain on
Federal Energy Minister Chris Bowen said this afternoon he was confident the lights would remain on in Queensland and New South Wales this evening, despite the warnings.
Mr Bowen says AEMO's intervention in the system would continue as long as necessary, and the situation had been exacerbated by coal-fired power stations being offline.
"AEMO working with us, working with the states, has avoided any load shedding to this point, and I have confidence they will be able to continue to do that, subject to any further unexpected outages," Mr Bowen said.
He said the Australian Energy Regulator had put power retailers and producers on notice about gaming the system during the current energy crisis.
"Reminding them of their obligations under the law for fair bidding, for accurate bidding, and reminding them of the ramifications if they don't, and informing them, as they should expect, that the Australian Energy Regulator is and will continue to monitor their behaviour very quickly."
South Australian Premier Peter Malinauskas said the energy market operator was taking the necessary steps to ensure supply.
"Naturally the [state] Energy Minister [Tom Koutsantonis] has been in active briefings across the weekend, particularly with AEMO, making sure that we can be confident of supply," he said.
"I think what Australians are witnessing across the eastern seaboard at the moment is the electricity market in many respects failing — failing people, failing businesses — and that's the cause of, I think, a degree of alarm.
"My advice is that the national energy ministers council continues to meet and discuss these issues.
"I'm taking the opportunity later this week to actually meet with the new federal Minister for Energy Chris Bowen to have active discussions and further briefings regarding the matter.
"All the advice that we've received is that the energy market operator is taking the necessary steps to ensure supply for the state and if there was a change in those circumstances we'd naturally want to be advised of it pretty quickly."
