It comes as Australia’s energy regulator meets with generators and ministers in a bid to keep the east coast’s power supply secure.

Despite electricity shortfalls in Queensland and NSW on Tuesday, blackouts were avoided after intervention from the Australian Energy Market Operator overnight.

The chair of the Australian Energy Regulator Clare Savage said talks were taking place on Wednesday to ensure there was enough power supply.

Despite shortages in some of the market, Savage said generators were doing everything they could to keep the power running.

“Supply is very tight right now, but we do know there is more generation available that is being bid into the market,” she told the Seven Network.

“The Australian Energy Market Operator is working around the clock with generators to make sure we have enough supply to keep the lights on.”

Savage said she wrote to every generator in the east coast on Tuesday to make sure they understood their responsibilities.

“We saw the situation evolve over the weekend where there was a price cap put into the wholesale market and a number of generators who said they were available suddenly withdrew their capacity,” she said.

“We wanted to be quick off the market to communicate with these generators to put them on notice and make sure they understand their obligations.”

In a statement on Wednesday morning, the market operator said it would encourage energy generators in the eastern states to bid for availability into the energy market, rather than direct them to do so.

“Wholesale electricity prices remain capped in Queensland, NSW, Victoria and South Australia due to wholesale prices reaching the cumulative high price threshold,” the statement said.

“The price cap will remain until cumulative wholesale electricity prices fall below the cumulative price threshold.”

Koutsantonis said he met with the Australia Energy Market Operator last night to discuss the situation.

“This is complete market failure, the energy system is broken – it’s completely buggered,” he told FIVEaa radio this morning.

“Prices of commodities have gone up, coal and gas have gone up dramatically so generators are now bidding as if they’ve bought their gas and coal for these new spot prices in the market.

“The Australian Energy Market Operator then puts a price cap in place cause it’s the right thing to do, so then the generators deliberately withdraw their services from the market so they can be capped, because they’re capped at $300.

“Then the operator then declares a lack of reserve and potential blackout so they can use their powers under the Act to direct this generation on.”

Koutsantonis said the Australian Government “is having to compel market operators to trade”.

“[Generators] are deliberately withdrawing their power to they can get paid more – the system is broken.”

The energy minister also said South Australia’s backup generation is not at its full capacity.

“We’re at the mercy of the market and we just hope that the operator gets its right in terms of directing all the generation to be on,” he said.

“I think they will, and they reassured me there probably won’t be blackouts.”

Koutsantonis said he would move to limit South Australian power exports to other states “if I see South Australian power being compromised”.

“Which is why it’s so important to have your own capacity in your own state,” he said.

“We need more storage, more batteries, more renewables, we have to transition to hydrogen as quickly as possible.”

– with AAP