In the middle of what is effectively an artificial gas-led energy crisis, the Prime Minister and Energy Minister may be carefully avoiding stating a natural suspicion. However, as an ordinary citizen I am not.
It is no secret that some of the east coast energy producers and wholesale suppliers - who transmit electricity down the wires and gas down pipelines - view the Liberal and National political parties more favourably than they do the Labor Party.
It is also no secret that a bitter LNP is casting about for ways to do the new Labor Government harm.
When listing reasons for the “perfect storm” that is now engulfing half the country, it would be prudent to recall the four main reasons being commonly cited by the media and, add the distinct possibility that the Leader of the Opposition and his shadow cabinet actively encouraged the boards of east coast power generators to initially refuse to cooperate with the Australian Energy Market Operator. This refusal reportedly represented the loss of est. 20 per cent of the east coast’s needed power supply.
All in the hope of further destabilising energy supply. Thus heating up the political situation ahead of the first sitting of the 47th Australian Parliament. The LNP’s end game apparently being to create uncertainty in the minds of international investors and drive money out of the country, to the detriment of the national economy and the federal government’s ability to raise required funding.
This would not be the first time the Coalition parties have used this ploy - the events of 1972 to 1975 bear that out.
ABC News, 16 June 2022:
The Federal Energy Minister insists the unprecedented market intervention to avoid blackouts across the east coast will continue for as long as necessary, throwing his full support behind the nation's energy regulators.
Yesterday the Australian Energy Market Operator (AEMO) took the extraordinary step of effectively seizing control of the energy market, suspending the spot price for wholesale electricity across the country.
It was the first time such a decision had been made, with the AEMO arguing it was impossible to ensure reliable power supplies without the intervention.
The AEMO had already been forced to put a cap on wholesale power prices, and had been ordering generators to continue producing power to ensure forecast shortages in supply in states such as New South Wales and Queensland were avoided.
Households and businesses have been urged to try to conserve power, switching off unnecessary appliances and lights in a bid to ease some of the pressure on the system.
Mr Bowen was asked whether it might be necessary to keep the market suspension in place for the duration of Australia's cold winter.
"I don't envisage that long, but it will be reviewed on a day-to-day basis," he said.
"I've been very clear with the chief executive of the operator. He has my full support for any action he deems necessary. The government will back the operator and the regulators 100 per cent.
"This intervention will not be lifted one day earlier than it needs to be, in his judgement."
What is the spot market for electricity?
After days of power uncertainty, the Australian Energy Market Operator yesterday declared it was suspending the spot market for electricity. So what does that mean for ordinary Australians?
Mr Bowen warned that NSW would be under "significant pressure" between 6pm and 8pm tonight, but that the market was working to avoid load shedding.
His NSW counterpart, Matt Kean, was confident there was enough reserve capacity despite a number of the state's generators being offline.
Mr Kean said that AGL's Bayside power station, which failed yesterday afternoon, would be online in time for the evening peak.
"We're cautiously optimistic that everything will be fine for the foreseeable future, but we're monitoring things closely because of the changed weather conditions and the unreliability of our existing kit," Mr Kean said.
Some generators have been accused of effectively gaming the system by refusing to produce electricity for the market, arguing the price cap means they are operating at a loss, and only switching back on when ordered to do so by authorities.
Those demand notices trigger the possibility of taxpayer-funded compensation for the energy companies.
Mr Bowen said there would be close scrutiny on energy producers.
"I'm not here to second-guess," he said. The energy regulator has our full support in monitoring all behaviour.
"I'm not here to make accusations. I'm here to say the regulator and operator has our full support in any action that they deem necessary — as they have done and as they'll continue to do."
Market rules could be rewritten after crisis
Prime Minister Anthony Albanese said the east coast electricity crisis could prompt a reworking of the National Energy Market (NEM) rules, including the incentives for generators to pump electricity into the system.
"There are weaknesses, clearly, that have been exposed, and all of the lessons of what is happening will be examined," he said.
"If there need to be any policy adjustments, then they'll be made."
The federal government has said the nation's energy woes are the result of a "perfect storm" — soaring international demand for Australian gas and coal prompted by countries weaning themselves off Russian energy supplies, the cold snap hitting a large swathe of the country, and unscheduled outages in Australia's ageing fleet of coal-fired power plants…..
Read the full article here.
ABC News, 16 June 2022:
….Tim Buckley, director at the IEEFA, said it was time these big companies were "called out".
"It's not about the energy not being there, it's about too much of it being suctioned out of our domestic east-coast market off to export," he said.
"I would be arguing we do need a carbon-export super-tax right now as a big stick to smash these multinational companies.
"They pay next to no royalties for our resources."…..
BACKGROUND
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In 2022 most of Australia’s energy still relies on traditional sources, non-renewable fossil fuels. According to the Dept. of Industry, science, Energy and Resources coal and gas account for about 79% of all electricity generation.
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