In the face of an energy crisis, Australia’s energy minister has urged residents of New South Wales, which includes the country’s largest city Sydney, to turn off their lights.
If people “have a choice,” Chris Bowen says they should not use electricity for two hours every evening. He did say, however, that he was “confident” that blackouts would not be necessary. It comes after the suspension of Australia’s main wholesale electricity market due to a price increase. Mr. Bowen urged residents of New South Wales of Australia to use as little energy as possible.
During a televised media conference in Canberra, he said, “If you have a choice about when to run certain items, don’t run them from 6 to 8 [in the evening].” Australia is a major exporter of coal and liquefied natural gas, but it has been experiencing a power outage since last month. Coal is still used to generate three-quarters of the country’s electricity. It’s been accused for a long time of not doing enough to reduce emissions by investing in renewables.
Why is there a crisis?
Australia has been hit hard by coal supply disruptions, outages at several coal-fired power plants, and rising global energy prices in recent weeks. Some coal mines in New South Wales and Queensland were flooded earlier this year, and production at two mines that supply the market’s largest coal-fired station in New South Wales has been cut due to technical issues.
Due to unplanned outages and scheduled maintenance, about a quarter of Australia’s coal-fired electricity generating capacity is currently offline. As a result of Russia’s invasion of Ukraine, global coal and gas prices have risen, causing some electricity producers’ costs to rise.
To minimise the stress on the system, AEMO is requesting consumers in New South Wales to temporarily reduce their energy usage, where safe to do so. pic.twitter.com/t87JgvObGA— AEMO (@AEMO_Energy) June 15, 2022
Meanwhile, energy demand has risen as a result of the cold spell and the opening up of Australia’s economy following the removal of Covid-19 restrictions. All of this has pushed wholesale power prices above the A$300 (£173; $210) per megawatt hour price cap set by the Australian Energy Market Operator, the market’s regulator (Aemo).
Several generators, however, decided to withhold capacity because the cap was below their cost of production. Aemo took the unusual step of suspending the market on Wednesday, announcing that it would set prices directly and compensate generators for the shortfall.
Consumers in New South Wales were also asked to “temporarily reduce their energy usage.”
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