Blackouts still a risk for QLD as regulator mulls giving control back to generators

Queenslanders are being warned they may face blackouts, even as the regulator moves to lift its unprecedented control of the electricity market.

Queenslanders are being warned the risk of blackouts remains real, even as the regulator moves to lift its unprecedented control of the electricity market.

The announcement comes the day after Energy Minister Chris Bowen said the worst of the energy crisis had passed, but that he remained “alive to the risks” remaining.

On Wednesday last week regulator the Australian Energy Market Operator took the shocking step to declare the electricity market had become “impossible to operate” and took full control of the market away from public and private power generators.

The energy regulator is considering lifting its suspension of the electricity market. Picture: NCA NewsWire / Andrew Henshaw

The intervention was required after skyrocketing wholesale prices led to AEMO implementing a price cap, which saw generators produce less power creating the risk of blackouts in Queensland and some other states.

On Tuesday evening AEMO released a statement, following a meeting with industry representatives, revealing it was considering lifting the market suspension it put in place if strict conditions were met.

Despite this it warned that while there was enough supply for last night, it was still required to “manually direct generators” to avoid blackouts.

Criteria that have to be met before AEMO relinquishes control of the market include certain pricing conditions and a reduction in the volume of times it is required to intervene and direct generators to increase supply.

Climate Change and Energy Minister Chris Bowen. Picture: NCA NewsWire / Martin Ollman

It remains uncertain when these conditions will be met, but once they are there will be a 24 hour monitoring period to ensure another suspension will not be immediately required.

“These criteria will provide indicators of the operability of the market … to give AEMO sufficient confidence that it can end the market suspension with minimal risk of the same conditions re-emerging in the very short term,” the AEMO statement said.

But the regulator warned even after the suspension is lifted, there will remain some risk of blackouts due to the ongoing issues, whether it be the cold weather, war in Europe driving up gas prices or coal generators units breaking down or coming off line for maintenance.

“Irrespective of market operations, underlying factors mean there may continue to be challenges managing supply and demand, and AEMO continues to monitor reserve conditions across all NEM regions,” it stated.

Mr Bowen said on Monday that he believed the nation was “through the worst of the pressures on the energy system”.
“There’s no complacency. We’re very alive to the risks that remain in the system. We remain very vigilant about what can go wrong from here,” he said.