National spot electricity market suspended as SA avoids major power outages so far

South Australians are being warned of power outages this evening, as the nation’s electricity grid is pushed to the brink – while 1100 customers lose power in an unrelated blackout.

Power outages across Adelaide have been flagged tonight as the nation’s electricity grid is pushed to the brink

The Australian Energy Market Operator released a blackout warning on Thursday morning, saying the SA region was likely to reach a Lack of Reserve Level 3 (LOR3) status between 8.30pm and 9.30pm tonight.

The warning indicates there is expected to be very low power reserves during those times and load shedding may be required to ease pressure on the system.

Several suburbs, particularly in Adelaide’s north west, should prepare for manual blackouts of 45 minutes tonight.

It comes as 1100 customers in Campbelltown were affected by an outage just after 11am on Thursday.

However, SA Power Networks spokesman Paul Roberts said it was not planned.

“It has nothing to do with load shedding,” he said.

It is still anticipated manual load shedding measures could be undertaken on Friday night too.

The energy market operator took the unprecedented step of suspending the nation’s crisis-ridden wholesale power market to avoid blackouts and ensure Australian homes and business could be “sure that the lights will go on when they flip the switch’’.

AEMO boss Daniel Westerman announced the action on Wednesday afternoon, declaring the body could no longer control the nation’s electricity market.

“This decision was made because it was impossible to operate a system under current conditions, while ensuring reliable, secure supply of electricity to Australian homes and businesses,’’ he said.

“What we’re seeing is very challenging times and right now, it would seem that the market is not able to deal with all of the factors that are thrown at it.’’

Earlier, a warning had been issued for rolling blackouts on Wednesday evening, but in the end no major outages were required.

SA Power Networks head of corporate affairs Paul Roberts said the Lack of Reserve Level 3 (LOR3) warning had been reduced.

“That has been downgraded to LOR2, which can only be a positive thing,” he said.

Tim Seal with his grandson Eddie 3 in Norwood. Picture Matt Turner.

In the most significant intervention it can make, AEMO will now effectively run the market itself, instead of leaving it to generators to determine prices.

Generators will still be paid at the capped price of $300MW-hour in SA, Victoria, NSW and Queensland. However, that cap meant some generators had withdrawn from the market, concerned about making a loss. Under the suspension generators could receive between $300 and $500MW/H.

Mr Westerman would not comment on what this meant for consumers but said “it’s not true to say that prices will go up under this market suspension’’.

Mr Westerman urged generators to act in “good faith’’ but would not comment on whether some were trying to ‘game’ the systems to drive prices and profits higher.

“By suspending the market what we’re creating is one simple place where generators will put all of their availability and be dispatched in a simple, methodical way and have their costs recovered.’’

Mr Westerman He declined to predict what was needed to be prevent a repeat of such a collapse in the future, only saying it was “interesting question’’ as to whether the rules which govern the electricity market need to be rewritten.

MORE: So what does this mean? Your power crisis questions answered

Australian Energy Market Operator CEO Daniel Westerman. Picture: NCA NewsWire / Nicki Connolly

The market suspension will be reviewed daily for each state in the national market.

“We will restart the market once we are confident that the market will operate,’’ he said.

Premier Peter Malinauskas said the energy crisis was a “market failure on a grand scale’’.

Mr Malinauskas will meet with Federal Energy minister Chris Bowen in Canberra on Thursday, putting forward SA’s ambitious hydrogen plans to help prevent future crises.“I’m particularly interested in what we can extract from the Commonwealth in terms of working with us on hydrogen,” he said.

SA is facing worrying electricity shortfalls this week, with AEMO predicting very low energy reserve levels on Thursday between 8am and 11.30am and again from 1.30pm Thursday to 4am on Friday.

AEMO has issued a Lack of Reserve Level 3 (LOR3) warning for those times, which could trigger emergency load shedding measures to protect the system.

This involves rolling, manual blackouts of 45 minutes in certain areas to relieve pressure on the system.

The measures have not been used in SA since February 2017.

Australian Energy Council chief executive Sarah McNamara supported AEMO’s move to take control of the market, and said the power system was “unmanageable” under the “unprecedented circumstances”.

“We hope conditions improve in this new phase and we can soon return to an uncapped market,” Ms McNamara said.

Norwood resident, Tim Seal will “deal” with the energy price brunt but is “concerned” for the younger generations who will be grossly impacted.

The self-funded retiree said that his daughter and her young family will “definitely” be affected by the increase in energy prices along with the thousands of South Australian families struggling to keep up with the constant rising cost of living.

He said that the power outages are a concern but said he supports “whatever needs to be done to keep the costs down”.

Mr Seal thought he might be safe to keep his gas heating on, but fears the anticipated rise in gas prices might affect how often he reaches for the dial. “(The rising cost) is not going to destitute me but it’s not ideal,” he said.