Queensland residents are experiencing power interruptions as electricity generators reduce output in reaction to a wholesale price cap, which has doubled in a year.
The Australian Energy Market Operator (AEMO) has issued a blackout notice for Queensland’s south-east and the east coast between 5.30pm and 8pm on Monday, and again on Tuesday morning.
To save energy, residents have been asked to turn down heating and turn off domestic appliances.
After seven days of rising wholesale costs, the operator has set a $300 per megawatt restriction on power spot prices.
‘AEMO has seen generation bids drop as a result of the managed price cap in Queensland,’ the firm said in a statement.
Demand could exceed supply in sections of Queensland connected to the National Energy Market (NEM) from early Monday evening, according to the operator, due to a lack of reserve electricity in the system.
‘To preserve power system security, AEMO will take available options to offer additional supply or demand reduction,’ it stated.
‘AEMO will continue to closely monitor reserve conditions in Queensland, NSW, and the NEM as a whole, issuing additional updates as conditions change.’
Queensland’s wholesale spot prices have doubled in the year to March, according to the market operator.
The country’s coal power plants must be brought back into service as quickly as feasible, according to the incoming federal Labor government.
At least a quarter of Australia’s coal-fired electrical generation is currently down, and the east coast is bracing for a bitter winter with skyrocketing electricity prices.
The Australian Energy Regulator (AER) indicated earlier this month that wholesale prices in the state, which are currently the highest in the country, are unlikely to reduce before 2024.
Paul Simshauser, CEO of Powerlink Queensland, asked individuals to reduce their power usage whenever possible.
‘There’s an unusual mix of unplanned generator outages, cold winter temperatures, and high electrical demand,’ he said.
When possible, residents should heat only one room and leave appliances, pool pumps, and devices on standby mode.
Lighting, advertising displays, and water heating systems have all been urged to be reduced by retailers.
‘By carefully monitoring electricity use at home and at business, the community can assist in maintaining Queensland’s power system security,’ Mr Simshauser said.
Part of Queensland’s dilemma is that fossil fuels account for 70% of its electricity output, and generators are suspected of bidding higher to profit from rising international coal and gas costs.
Minister of Energy Mick de Brenni has denied that Stanwell and C S Energy are price gouging, claiming that they merely bid to “cover costs” and that he will not order them to drop their bids.
‘Queenslanders have previously conserved energy in similar situations… Queenslanders, I’m certain, will be able to do it again.’
Pat Weir, a spokesman for the Liberal National Party, said the power outage was forcing businesses to close.
‘We already have the highest electricity prices in the country, and now we’re being told the lights might not even stay on,’ Mr Weir said.
‘Because of a government that has failed to plan for the future, major employers are closing tonight, and Queenslanders’ lifestyles are being impacted.’
A one-time Queensland government rebate will save households around $44 on their monthly electricity bills starting in July, with costs expected to climb by at least $41 to $55.
Queensland household and business costs are expected to climb again by the end of the year or in early 2023, according to the AER.
Millions of Australians will be forced to pay up to $270 more per year for electricity as one of the country’s main energy companies raises its tariffs.
Origin Energy stated on Friday that beginning July 1, its tariffs will increase by 14.4% for residents of New South Wales.
The energy company will boost costs by 13.7 per cent, or $223, in Queensland and 10.4 per cent, or $180, in South Australia.
Victorian homes will be slammed with higher electricity rates in January.
In the year to March, wholesale electricity rates have surged by 141 per cent across Australia, forcing one power company executive to advise his 70,000 customers to switch provider.
Origin executive general manager of retail Jon Briskin said the company was ‘absorbing some of the higher energy expenses’ to minimise the rate hikes passed down to customers.
In his first media conference as federal Treasurer, Jim Chalmers warned of a ‘perfect storm’ for energy price spikes.
‘This perfect storm of energy price surges is inflicting significant damage to our employers, to our homes and to our national economy,’ he said.