Australia’s energy regulator took control of the national power grid on Wednesday, suspending a market system plagued by soaring prices and the threat of widespread blackouts.
The Australian Energy Market Operator has announced that it has “suspended the spot market“electricity in”all the regions“because he no longer insured”safe and reliable supply“.
The electricity used to power Australian homes is generally bought and sold in the densely populated east of the country, a system designed to reduce wholesale costs and diversify supply.
But the market was thrown into crisis by a series of supply and demand shocks. The regulator then intervenes to set prices and organize distribution.
Australia is one of the top three gas and coal producers in the world, but almost a quarter of the thermal power stations on the East Coast are currently shut down due to breakdowns or maintenance work.
Gas export on the rise
The war in Ukraine has also caused demand for Australian gas exports to soar, absorbing any surplus that might ease the shortage in the domestic market.
Supply problems were exacerbated by a cold spell on the East Coast, prompting electricity providers to ask households to restrict their energy consumption.
Most people on the east coast, including the 10 million people of Sydney and Mebourne, have been warned that power cuts could occur.
The regulator had already intervened on several occasions by asking companies to produce more and to cap prices.
“The best interests of consumers will always come first“, assured the Minister of Energy Chris Bowen shortly before the announcement of the regulator.
His Labor government blamed the crisis on the Conservatives in power until May, who defended coal over renewable energy.
Last year, 71% of electricity came from fossil fuels, and 51% from coal alone, according to official figures.