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New South Wales survived the biggest test of its power system since the closure of AGL''s Liddell coal power station, but the government now faces a delicate task to ensure power reliability over the summer amid heightened worries about disruption and spiking prices.
Hot weather on Wednesday coincided with an unexpectedly high number of outages at coal power units, in a big scare for the transitioning electricity system. The near-miss prompted pleas from major industrial users to solve the reliability issue by replacing capacity faster before controlled blackouts are invoked.
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Australian authorities have given themselves the power to block coal exports if the resource is needed to ease the country''s crippling power crisis in the latest measure taken to avert the risk of blackouts.
Rising coal and gas prices, coupled with outages at ageing coal-fired power stations, have plunged the market into turmoil this week, forcing the Australian Energy Market Operator to take control of the wholesale market to ensure reliable supply of electricity to eastern states.
The government of New South Wales invoked emergency powers on Friday to oblige miners operating in the state to redirect coal heading overseas to local generators. The precautionary move was taken to strengthen energy security on the advice of AEMO.
The energy crisis has highlighted the failure of Australia, one of the world''s largest producers of fossil fuels, to prepare for the transition to renewable energy sources by investing in modernising the country''s electricity infrastructure, analysts say.
"We are in an invidious position. It is a global story as there is a gas shortage and prices are skyrocketing but for Australia it is combined with coal-fired power stations going offline," said Ben Oquist, executive director of the Australia Institute think-tank.
The crisis has highlighted how a failure to prepare for renewable energy becoming a larger part of domestic supply was hitting the country''s consumers in the form of higher bills and potential blackouts, he added.
The crisis has coincided with unseasonably cold weather, with many consumers forced to use freestanding heaters due to the lack of insulation and central heating in many homes.
The energy supply squeeze has heaped pressure on Prime Minister Anthony Albanese, who took office less than a month ago and pledged during his election campaign to deliver cheaper energy bills. He has also recommitted to a sharper reduction of carbon emissions by 2030 than the previous government and to stimulate more investment in renewable energy.
Morrison also launched a "gas-fired recovery" plan during the pandemic, which provided grants and subsidies for new exploration projects.
Oquist said the former prime minister should have promoted investment in the electricity grid and storage to promote renewable energy. "We were supposed to have a gas-fired recovery but I think we got a gas-led catastrophe," he said. "Morrison put political muscle into gas during Covid but it has left Australia in a very vulnerable position."
Australia is one of the world''s largest gas producers but the fuel is mostly exported. Albanese said calls to build a gas reserve for domestic use needed to be set against increased risk if the industry were to break contracts.
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A severe heatwave is threatening to knock out electricity across parts of New South Wales as millions of residents brace for more stifling heat.
The Australian Energy Market Operator (AEMO) on Tuesday addressed blackout fears due to the anticipated pressure on the power grid over the coming days as residents try to keep cool.
The energy regulator has assured there is sufficient supply to meet electricity demand on Tuesday, but warned the blackout risk could increase on Wednesday as temperatures rise.
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