Across the eastern seaboard of the country, the national electricity grid is under intense pressure, exposing major issues within the opaque and complex spider's web which underpins how power is market-traded, and consumers left in the lurch when the system fails.
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The Australian Energy Market Operator (AEMO) has oversight of the National Electricity Market, which buys and sells power to feed the national electricity grid. It also plans, forecasts and models how the power is fed into the grid so that the lights stay on, the water stays hot, and industry can be assured of reliable supply.
The generators are the independent power providers, and are owned by a raft of different companies. Other companies, some owned or part-owned by the generators, distribute the power and manage the poles, wires and substations, and others, some also with links to the generators and distributors, retail the power to consumers.
It's a complex ecosystem in which the Australian Energy Market Commission makes the rules, and the Australian Energy Regulator oversees those rules governing such elements as how systems are kept secure, how spot prices for power are determined and how the shared transmission of power should operate.
The whole aim of this complexity is to deliver reliable and secure power supplies across the country to homes and industry, ostensibly at a reasonable price. Last year, for instance, there were $11.1 billion worth of trades on the national market.
After working well for some years, it is now looking like a very rickety, unstable structure with dire warnings of possible blackouts - triggered as a result of a Level 3 Lack of Reserve (LOR3) - across various parts of the country.
So why is this threat to the national power supply happening now?
Much of Australia's base load power generation comes from coal-fired power generation.
While it was generally reliable, much of this infrastructure is old and the companies that own it have been reluctant to invest in expensive upgrades because they recognise that the social and political landscape is rapidly changing, and power from renewables - wind and solar - is the preferred alternative. Investment is being channelled in that direction instead
So the infrastructure - some of which dates back to the early to mid-1970s - which historically has provided this base load is failing, suffers breakdowns, and requires irregular shutdowns to repair essential elements to the generation process, such as conveyors. That's one component to the problem.
But equally, power is like any other commodity: the scarcer it gets, the more it is worth. To generate power quickly requires buying it on the "spot" market. And spot prices are very high.
So big generators are being accused of "gaming" the system and holding onto their reserve power - not selling it into the market - so they can get the highest possible price for it.
To counteract this "gaming", AEMO introduced a price cap, a maximum market trading price. But the generators - which use coal and gas, both global commodities and now very expensive to buy because of international events like Russia's attack on the Ukraine - say the cap doesn't cover their operating costs. And so they can choose not to participate in the market.
Can't the Australian government compel the generators to sell their power?
It would have been easier when these were state-owned assets. But the sell-off of these assets to private industry through deregulation - except for in the ACT and Tasmania - makes coercion problematic, and direct intervention may only make matters worse. As thermal power generation slowly exits the market, gas has become the substitute. And wholesale gas prices have risen 141 per cent in the first quarter of this year, compared with 2021.
Australia produces a huge amount of natural gas but most is exported because this is where the big profits are.
The Australian Competition and Consumer Commission held an inquiry into power prices back in 2018 and introduced guidelines two years ago to stop generators from inflating wholesale prices or blocking access to critical contracts.
But they are still only guidelines.
What happened to our reserve power?
Generators have to be paid to hold onto reserve power capacity and there hasn't been an appetite to pay for capacity which isn't needed. It's insurance, of sorts. And we haven't been paying it.
AEMO has what is called a Reliability and Emergency Reserve Trader mechanism but this latest shortfall in supply appears to have caught the operator on the hop.
This all smacks of pretty poor demand modelling by the energy market operator, and poor oversight of the operator by the previous federal government. Angus Taylor was the previous Minister for Industry, Energy and Emissions Reduction.
Who are the big generators, and why is there not a direct appeal to them to support the market?
That appeal has been made, but all the big market generators have their own operating issues to deal with, including raw material supply shortages, breakdowns, and accidents. So they say.
Origin Energy, AGL and EnergyAustralia are the largest energy companies in Australia. Known as the 'big three', each has a significant share in the residential electricity and gas markets.
AGL is now racked with uncertainty at board level after its recent demerger proposal failed. EnergyAustralia, owned by the Hong Kong-based CLP Group with power assets in mainland China, India and Asia, intends to bail out of thermal power generation by 2040, or sooner if it can. It wants out.
And of late, Origin hasn't been able to get enough coal to keep its huge 2.8-gigawatt Eraring plant in NSW operating at anywhere near full capacity.