The energy market operator is expecting to have enough power in the system to avoid blackouts, but NSW will suffer another pressure point on Thursday night.
Unexpected outages as well as routine maintenance for power plants have strained energy supplies in the most populous state, with residents being asked to reduce non-essential usage from 6-8pm.
Pressure on the grid is expected to ease from Friday and through the weekend as more power units come back online.
The Australian Energy Market Operator (AEMO) has issued a level-three lack of reserve notice in NSW, meaning conditions exist where energy demand is outstripping supply and controlled load-shedding will be used as a last resort.
It has also taken full control of directing supplies from energy generators to the east coast power grid, and is setting prices for every state in the market until further notice.
NSW is expected to pull through Thursday night, while grid pressures in Victoria and Queensland remain in better shape.
NSW Energy Minister Matt Kean says he remains cautiously optimistic, with a major generator coming back online on Thursday night.
“Supply conditions will ease,” Mr Kean told reporters on Thursday.
“At this stage, we have confidence there’s enough reserve capacity in the system to ensure that we don’t have to ask people to be considerate of their options tonight.”
To minimise the stress on the system, AEMO is requesting consumers in New South Wales to temporarily reduce their energy usage, where safe to do so. pic.twitter.com/t87JgvObGA
— AEMO (@AEMO_Energy) June 15, 2022
Federal Energy Minister Chris Bowen says the AEMO taking control of the market has provided the best chance of it functioning properly for consumers.
“It means that the operator is effectively determining the best way for Australia’s energy to be generated and paid for and provided to consumers while the market simply wasn’t functioning,” he told reporters on Thursday.
Mr Bowen says the government is working on short-, medium- and long-term solutions to strengthen the grid and reduce energy prices.
“The problem is there is not enough investment in renewable energy. There hasn’t been enough investment in storage,” he said.
Prime Minister Anthony Albanese added that under-investment in transmission infrastructure had also created a problem, as the NSW Labor leader Chris Minns attacked the state government for a failure of privatisation.
But Mr Albanese says the crisis can’t be put down to a single factor.
“Ownership is just one factor and I don’t think it can be viewed in isolation from regulation and other matters,” he said.
“Part of the problem was over-investment in poles and wires. Some of the structures that were in place, that didn’t drive the investment to where it needed to go.”
While the market regulator has been tasked by the government to establish gas reserves to help avoid future supply constraints, Mr Bowen was less committal when asked about coal reserves as Europe seeks to increase its imports, with an embargo on Russian coal coming into effect in August.
Opposition Leader Peter Dutton said Labor was rushing into putting renewables into the system.
“You can’t firm up renewable energy the way in which people would want to at the moment,” he said on 2GB radio.
“Labor at the moment is rushing towards the new system, when frankly it’s not at a sensible pace.”
South Australian Premier Peter Malinauskas said the energy crisis was due to “long-term policy failure”.
“I don’t think the energy wars and the climate wars have served our nation very well at all,” he told Sky News