Australia’s national energy market will return to normal in a staged process after the market operator said it had growing confidence there was enough ongoing capacity for households and businesses.
The Australian Energy Market Operator will begin lifting its market suspension from 4am on Thursday citing a “clear improvement” in market conditions since it halted the market a week ago.
Improvements included 4000MW of generation returning to the grid after outages.
“The first step is that at 4am tomorrow, we will allow the market to set the price again,” AEMO chief executive Daniel Westerman said.
After the first step, AEMO expects the system used to schedule generation into the grid will be operating without failure with a low volume of directions to generators and a reduction in forecast shortfalls of energy as electricity suppliers respond to market signals.
“The second step will be to completely lift the suspension,” Mr Westerman said, adding that AEMO would monitor conditions for a further period of at least 24 hours before making a decision to formally lift the market suspension.
His organisation met with industry on Tuesday outlining what needed to occur to resume normal operation in the national electricity market following the suspension on June 15.
Energy Minister Chris Bowen said the actions had been significant and necessary.
“The Australian people can have confidence in … the market operator, (which) works closely with state and territory and the federal government to ensure that consumers’ best interests are protected and that our energy system remains reliable, despite the very considerable challenges that have been faced in recent weeks,” he said.
Liberal deputy leader Sussan Ley earlier said the Morrison government had plans in place to make the transition to cleaner energy as smooth as possible.
“At the heart of this problem is not understanding that a transition takes time and a transition uses gas,” she told Sky News.
“We did plan for the transition to renewables, we just didn’t plan it at a rate that pushed up power prices.
“It’s Labor that talks up the acceleration to renewables, which of course takes confidence out of the fossil fuels market. Coal-fired power stations heard those message from Labor.”
The ACCC has been given additional powers by the federal government to monitor energy pricing.