Eight million Australians urged to turn off lights
BBC – 04 July 2022
Australia's energy minister has urged households in New South Wales - a
state that includes the country's biggest city Sydney - to switch off their lights
in the face of an energy crisis.
Chris Bowen says people should not use electricity for two hours every
evening if they "have a choice".
However, he added he was "confident" that blackouts could be
avoided.
It comes after Australia's main wholesale electricity market was
suspended because of a surge in prices.
Mr Bowen asked people living in New South Wales to conserve as much
power as possible.
"If you have a choice about when to run certain items, don't run
them from 6 to 8 [in the evening]," he said during a televised media
conference in Canberra.
Why is there a crisis?
Australia is one of the world's biggest exporters of coal and liquefied
natural gas but has been struggling with a power crisis since last month. Three
quarters of the country's electricity is still generated using coal. It has
long been accused of not doing enough to cut its emissions by investing in
renewables.
In recent weeks, Australia has felt the impact of disruptions to coal
supplies, outages at several coal-fired power plants and soaring global energy
prices.
Flooding earlier this year hit some coal mines in New South Wales and
Queensland, while technical issues have cut production at two mines that supply
the market's biggest coal-fired station in New South Wales.
Around a quarter of Australia's coal-fired electricity generating
capacity is currently out of service due to unexpected outages and scheduled
maintenance.
Some electricity producers have seen their costs soar as global coal and
gas prices have jumped due to sanctions on Russia over its invasion of Ukraine.
Meanwhile, demand for energy has jumped amid a cold snap and as
Australia's economy opens up after Covid-19 restrictions were eased.
All of this has helped drive up power prices on the wholesale market to
above the A$300 (£173; $210) per megawatt hour price cap set by the market's
regulator, the Australian Energy Market Operator (Aemo).
However, that cap was below the cost of production for several
generators, who decided to withhold capacity.
On Wednesday, Aemo took the unprecedented step of suspending the market
and said it would set prices directly and compensate generators for the
shortfall.
It also asked consumers in New South Wales to "temporarily reduce
their energy usage".
What happens next?
Aemo has not given a timeline on when the suspension would be lifted. It
said in a statement, "The price cap
will remain until cumulative wholesale electricity prices fall below the
cumulative price threshold."
"Aemo, as the national power system operator, will continue to
monitor the situation and provide further updates should conditions
change," it added.
On Thursday, Australia's biggest electricity producer AGL Energy said it
expected to be able to supply more power to businesses and consumers in the
coming days.
It has three units that have been out of service at its coal-fired plant
in Bayswater, New South Wales.
They are among several planned and unplanned outages that have helped
cause the power crisis.
AGL said that one of the units should return to service on Thursday,
while another will come back online by Saturday.
Meanwhile, Australia's new Prime Minister Anthony Albanese said the
crisis would be raised at a meeting with state premiers which starts on
Thursday.
Lynne Chester, an energy expert from the University of Sydney, told the
BBC that policymakers have been aware of the risks of ageing generators for
decades.
"The sector's regulators and policy makers have ignored the
escalating capacity constraints of aging generation assets, fired by fossil fuels,
that dominate the sector," Prof Chester said
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