AEMO activates emergency mechanism for gas supplies
The AEMO triggers its emergency gas supply guarantee mechanism for just the second time on record to help arrest shortfalls in Victoria.
The Australian Energy Market Operator has activated its emergency gas supply guarantee mechanism for just the second time on record to help arrest shortfalls in Victoria as the nation’s electricity market lurches to a fresh crisis.
Storage levels at Victoria’s underground gas storage plant, Iona, dropped to a record low and forced AEMO on Monday to put an official system security threat in place until the end of September.
It has now resorted to triggering the mechanism for just the second time since it was introduced in 2017, just weeks after the national electricity market was temporarily suspended amid a broader global energy crunch.
“AEMO has activated the gas supply guarantee mechanism to secure additional gas supplies from Queensland-based gas producers to support gas-powered electricity generation in the National Electricity Market,” AEMO said in a statement.
The market operator held a phone hook-up meeting with Queensland gas producers earlier on Tuesday to determine the available levels of supply for Victoria and said both producers and pipeline operators had responded positively to the request for more volumes to be sent south.
“AEMO will continue to work with the parties to understand gas supply availability. Challenging generation conditions experienced from early June continue in the national electricity market,” AEMO said.
“This has resulted in a greater reliance on gas-powered generation and larger than forecast inventory reduction at the Iona gas storage facility in Victoria.”
The latest shortage comes as gas demand is typically three times higher in the Victorian winter than summer. A cold snap and booming LNG exports have limited domestic volumes while Russian sanctions have deprived global markets of supply and deepened a global energy squeeze.
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