Qld energy crisis: Yours questions answered

Queensland has narrowly missed a night of blackouts, but there are warnings another increase to our power bills could be on the cards as the energy crisis deepens. So what exactly is happening? and what does the future hold? We answer your questions.

Queensland has narrowly missed a night of blackouts, but there are warnings another increase to our power bills could be on the cards as the energy crisis deepens. So what exactly is happening? and what does the future hold? We answer your questions.

WHAT HAPPENED YESTERDAY?

Skyrocketing wholesale electricity prices in Queensland were remaining stubbornly high, forcing the regulator the Australian Energy Market Operator (AEMO) to implement a price cap on what power generators were charging.

Wholesale prices had been an average of $674/MWh for seven days, triggering the price cap of $300/MWh about 7pm on Monday.

That is compared to more normal prices of $50-100/MWh.

The price cap had not resolved the situation on Monday so remained in place and will be reviewed at 4am on Tuesday morning.

WHY WERE PRICES SO HIGH?

There are a series of factors in play creating the high electricity prices.

Global gas prices have been driven to extremes due to the war in Europe, while some coal power has come offline due to a range of factors, including the Callide C explosion last year, anomalous weather including flooding, as well as some coal mines which supply the power stations flooding.

WHY DID THIS CREATE A RISK OF BLACKOUTS?

When the price cap was triggered, generators reduced their bids into the national energy market, which essentially means they were pumping out less supply when they were limited in how much they could charge.

Brooke Davis, 14, Jenny Davis, Chloe Davis, 16, and Scott Davis pictured at their Springfield Lakes home. (Image/Josh Woning)

AEMO issued several warnings, called Lack of Reserve notices to encourage the generators to produce enough supply to meet consumer demand.

At one point, AEMO issued a severe warning, stating that there would be a “deficit in the supply/demand balance” – or risk of blackouts – between 5.30pm and 8pm on Monday.

If this did not resolve, it had the option of directing generators to produce more as required.

WHO IS THE AUSTRALIAN ENERGY MARKET OPERATOR?

It manages the day-to-day operations of a number of electricity and gas markets, including the national energy market which Queensland is part of.

It is responsible for the wholesale electricity market, but not the retail electricity prices the consumers pay. The consumer-focused electricity regulator is the Australian Energy Regulator.

WHAT, IF ANYTHING, CAN BE DONE?

There are a range of options currently being looked at, but very few are immediate-term solutions.

It is a broader issue than just the current Queensland wholesale prices affecting the east coast of Australia.

The best case scenario for the immediate term is for more coal-powered generation to be able to be brought online, which would ease the price pressure quickly.

Energy Minister Chris Bowen has already been speaking with industry with regards to a variety of other options and held crisis talks with the state energy ministers last week where they agreed to give regulators greater power to procure and store gas.

Other measures raised by industry or think tanks, but not yet endorsed by government, include modifying the gas price trigger which requires producers to release more gas into the market but takes a long time to come into force, or a windfall profits tax.

Originally published as Qld energy crisis: Yours questions answered