Australia’s energy market operator says it will lift the suspension of the country’s main wholesale electricity market as its electricity crisis eases. The ban will be temporarily lifted on Thursday before a final decision is made.
In an unprecedented move last week, it suspended trading on the platform following a surge in prices. Officials also urged people in the state of New South Wales to save electricity over concerns about shortages.
The state – which has a population of about 8 million – includes Sydney, the largest city in the country.
In a statement on Wednesday, the Australian Energy Market Operator (AMO) said it “sees a clear improvement in market conditions” and will resume trading in Sydney on Thursday from 04:00 (9:00 BST on Wednesday).
It said it would monitor the market for at least 24 hours before making a decision to formally lift the suspension.
“We have seen nearly 4,000 megawatts of generation return to service since this time last week, and that means the risk of any shortfall has reduced markedly,” Aemo chief executive Daniel Westerman said in a televised media conference. Australia is one of the world’s biggest exporters of coal and liquefied natural gas, but it has been battling an electricity crisis since last month.
Three-quarters of its electricity is still generated using coal, and it has long been accused of not doing enough to cut its emissions by investing in renewable energy. In recent weeks, the country has felt the effects of coal supply disruptions, shutdowns at many coal-fired power plants and rising global energy prices.
Meanwhile, energy demand surged amid a cold winter and Australia’s economy opened up after the easing of Covid-19 restrictions. All of this helped set electricity prices in the wholesale market above the A$300 (£170; $208) price range per megawatt-hour by Aemo.
However, this limit was lower than the production cost for many generators, which led to the decision to stop capacity. Last Wednesday, Amo took the unprecedented step of suspending the market, saying it would set prices directly and compensate for the shortage of generators.
