Why are producers withdrawing from supply in the midst of an energy crisis?

An energy economist calls for an independent inquiry into Queensland’s power output after millions of households were told to conserve power for a second night in a row due to reduced output from generators in response to a price cap.

Australia’s Energy Market Operator (AEMO) ordered power generators to again cover forecast electricity supply shortages last night, after a perfect storm of energy chaos in Queensland and New Zealand. South Wales, including cold weather, offline generators and soaring electricity prices.

Victoria Energy Policy Center director Bruce Mountain said Australia was going through an “absolute market crisis”.

Professor Mountain said generators are largely insulated from volatility in spot prices (the market value of energy) and effectively maintain production to drive up prices.

“Nothing like this has been experienced in Australia,” Prof Mountain said.

“What’s really going on, I guess, is the intimidation of coal and gas producers – they’re pointing the finger at spot prices.”

Bruce Mountain thinks there should be an investigation into the current energy shortages.(ABC News)

He said most generators secure their fuel through contracts that are priced months in advance.

“I suspect this is most likely a very serious case of market cornering,” Prof Mountain said.

“We need an independent investigation into the extent to which their production is affected by spot prices.

“Serious government action is needed now.”

Why are some generators turned off?

Because the AEMO set a fixed price cap for consumers at $300 per megawatt hour, some generators pulled supply from the market.

Job , updated

#producers #withdrawing #supply #midst #energy #crisis

Leave a Comment

Your email address will not be published. Required fields are marked *