‘Overhaul power market rules’

Victorian Energy Minister Lily D’Ambrosio has accused federal counterpart Angus Taylor of an ideological approach to energy ­reform.

Victorian Energy Minister Lily D’Ambrosio has accused federal counterpart Angus Taylor of an ideological approach to energy ­reform and called for an overhaul of market rules to guard against a ­repeat of last summer’s rolling blackouts.

Ms D’Ambrosio said Mr Taylor needed to listen to expert opinion rather than undertake repeated market interventions such as retail price caps, divestment threats and federally underwritten investment schemes.

“The only person who thinks that Angus Taylor is doing a good job is Angus Taylor,” she told the National Energy Summit in Sydney on Wednesday.

The comments came as Mr Taylor called for stronger measures to keep ageing coal-fired power stations operating for longer.

Ms D’Ambrosio said the generators could not guarantee availability at critical times and more new supply and “congestion-busting” investment in transmission was needed to protect consumers from supply losses.

Tens of thousands of Victorian homes were plunged into rolling blackouts ordered by the Australian Energy Market Operator to protect the grid after five coal units went out of service during a heatwave in January.

The AEMO warned earlier this year that there was a heightened risk of more blackouts this summer because of faults at the Loy Yang A coal-fired station and a halving in capacity from the Mortlake gas generator that have stripped 759MW of capacity out of the market until late ­December.

The AEMO said there was a risk the units might not come back on line in time.

Ms D’Ambrosio backed AEMO chief Audrey Zibelman’s call for rule changes to allow the creation of a strategic reserve to buffer the system against outages.

Victoria has sought an exemption from National Energy Market rules that forbid the purchase of long-dated reserve power to help ensure against blackouts

Victoria wants to buy reserve power up to three years ahead, which Ms D’Ambrosio said would lead to more investment in power generation and lower prices for consumers.

Strategic reserves and long-dated forward purchases have been opposed by the rule-making body, the Australian Energy Markets Commission, because they are seen as distorting a market that is built on constantly matching supply and demand.

Diesel generators purchased by the South Australian government as back-up following the 2016 blackouts have since been sold to renewable energy suppliers to “firm” their supplies.

Ms D’Ambrosio accused the AEMC of “tinkering” with the rules without acknowledging the risk that unreliable plants would not be available when needed.

On Wednesday, Mr Taylor said he supported Victoria’s call for long-dated reserves: “I think this is worthy of consideration; like any­thing, you’ve got to work through it and come to a view about whether it’s going to deliver the outcomes we want.”