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Electricity crunch sparks new SA supply warning


Australia’s energy operator says conditions remain “volatile” within the National Electricity Market despite the situation improving since last week, as new electricity supply warnings are issued for South Australia.

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The Australian Energy Market Operator (AEMO) on Monday afternoon signalled it is forecasting an electricity supply crunch in the South Australian region on Tuesday.

AEMO, which last week suspended the “impossible to operate” electricity market, has issued a “Lack of Reserve Level 3” warning for South Australia from 6.30pm to 8pm.

A LOR3 notice signals a forecasted “deficit in the supply/demand balance” where the “available electricity supply is equal to or less than the operational demand”.

“Controlled load shedding may be required as a last resort to protect system security and prevent long-term damage to system infrastructure,” AEMO states.

AEMO issued numerous LOR3 notices for South Australia last week but was able to avoid any blackouts, with the market operator now manually directing “a large number of generators to be available to meet consumers’ energy needs” after suspending the market last week.

In an update yesterday, AEMO said electricity reserves “have improved” across the country but “conditions remain volatile in the National Electricity Market”.

“The current position has improved due to softer electricity demand driven by increased temperatures, the return to service of several large generating units, and other measures implemented in collaboration with network businesses to ensure maximum availability of critical transmission infrastructure,” AEMO said in a statement.

“We’re continually assessing the ability to lift the suspension. This will be confirmed as early as possible, giving market participants time to appropriately prepare.”

Meanwhile, the chair of the Australian Competition and Consumer Commission says the agency is actively monitoring power companies to ensure they do not act against the interest of consumers, withhold supply or set retail prices above the market safety net.

“Under direction from the federal government, we will use our full information gathering powers to provide greater transparency around the factors influencing electricity and gas prices, including profits and margins from a wide range of energy companies,” ACCC chair Gina Cass-Gottlieb said in a statement on Monday.

Power prices spiked in June up to five times higher than the wholesale price at the start of 2021, the ACCC revealed yesterday.

The consumer watchdog will report back to Australia’s energy ministers about the state of the national energy market in July.

– With AAP

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