Markets

How AEMO plans to stop ‘dysfunctional’ market behaviour

The Australian Energy Market Operator will lift its suspension of the National Electricity Market, CEO Daniel Westerman has confirmed.

He says he has spoken to all energy ministers in the NEM, which includes eastern states and South Australia, this morning.

He reiterated AEMO was forced to suspend market pricing because it had become impossible to operate, but the situation had improved significantly.

“The first step will take place at the end of trading day today and that is 4:00am tomorrow morning when we will allow the market to set the price again,” he told reporters.

“The second step will happen 24 hours after that, when we will be able to formally lift the market suspension.”

“After taking that first step, I would expect to see three things.

“First, the system that we use to schedule generation into the grid at the lowest cost to consumers, the dispatch engine will be working without failure.

“Second, that AEMO will be able to reduce the number of directions that we are giving to generators and, third, we would expect to see a reduction in the forecast shortfalls of energy or low reserves as generators respond to those market signals.”

Energy Minister Chris Bowen said the east coast energy system had been under immense pressure over recent weeks, but the state and federal governments had worked together closely to keep the lights on.

“We have avoided blackouts and load shedding over recent weeks, despite very considerable challenges. The actions taken by AEMO last week were very significant and very necessary and as I said at the time, had my full support.”

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