Five states in Australia are in the middle of an energy crisis as the Australian Energy Market Operator (AEMO) warned of possible power interruptions on June 14.
AEMO notified the residents of Queensland, New South Wales, Victoria, South Australia, and Tasmania of the power outages.
Several Parts of Australia to Experience Outage
According to ABC Australia, Queensland and New South Wales won't have electricity from 5:00 p.m. until 10:30 p.m. Australian Eastern Standard Time on June 14.
As for Tasmania, South Australia, and Victoria, the power interruptions will happen from 6:30 p.m. to 7:30 p.m. Australian Eastern Standard Time.
The regulator said there are current discussions with the scheduled generators, and they are seeking around 2,000 megawatts of generation in each Queensland and New South Wales.
AEMO is encouraging the generators to bid their availability into the market now so there won't be any power outages on June 15.
Reason Behind the Outages
According to The Guardian, the outages came after the AEMO capped wholesale prices on June 2, resulting in coal and gas generators taking power plants offline.
The regulator had no choice but to implement the cap because the cost of power had been rising so fast in the five states that they had to step in.
The price cap for the residents in the listed areas is $300 a megawatt-hour.
However, Paul McArdle, the founder of consultancy firm Globe-Roam, said that the spot price of $300 is not enough for generators to make money because of the rising cost of gas and coal on global markets after Russia's war on Ukraine.
The current gas price in parts of eastern Australia should translate to $400 a megawatt-hour, but even that price range is only breakeven for a gas-fired power station.
Sarah McNamara, the chief executive of the Australian Energy Council, said that this issue is temporary, but they are not sure when exactly it will ease up.
McNamara revealed that several coal plants suffered outages on the east coast of Australia because of unscheduled maintenance, but once they're up and running in the next couple of months, the electricity supply should go back to normal.
Daniel McClelland, the executive director of Alinta Energy, has asked the residents of the five states to prepare for higher electricity prices in the next two years.
The gas shortage in Victoria and the increasing wholesale power prices connected to the poor performance of coal-fired generators suggest there will be soaring bills.
On June 13, the former Prime Minister of Australia, Malcolm Turnbull, called on governments to order gas exporters to hold back more supply for the country and to lower the prices.
Solution for Electricity Crisis
Tim Buckley, the market analyst of Clean Energy, told 7News AU that the current issue with the electricity in the country needs attention from the government.
Buckley said that there should be an immediate focus on three things: energy efficiency, accelerating the deployments of firmed renewable energy, and grid transmission.
He believes that if these are done effectively in 10 Renewable Energy Zones, Australia will have a long-term solution to the power crisis.
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Written by Sophie Webster
