Aemo suspends spot market for electricity
Peter Hannam
After all those notices about shortfalls in the wholesale spot electricity market serving eastern Australia, it looks like the Australian Energy Market Operator has blown a whistle, and the game is suspended …
Daniel Hurst
The defence minister, Richard Marles, was also asked about his meeting on Sunday with his Chinese counterpart, Wei Fenghe, in Singapore and whether the trade tensions had been part of that discussion.
Marles confirmed that he had raised China’s security agreement with the Solomon Islands in Sunday’s meeting. Marles said there were other discussions that he would not disclose publicly, but added:
The meeting with Minister Wei began and more importantly, ended with a desire on the part of both of us to try and put the bilateral relationship [between China and Australia] into a better place, not just in terms of the area of defence, but generally.
Marles reiterated that it was “only the first step” and there was “a long way to go”.
(The trade minister, Don Farrell, has not been able to secure a meeting with his Chinese counterpart on the sidelines of a World Trade Organization conference in Geneva this week.)
Daniel Hurst
Japan and Australia are the very best of friends, deputy PM says in Tokyo
Richard Marles has spoken to reporters in Tokyo. The defence minister and deputy prime minister said the relationship with Japan was “front and centre in terms of our national interests”.
He said today’s meeting with his counterpart, Nobuo Kishi, was “of real substance”. He said in the 1980s commerce was at the heart of the Australia-Japan relationship. That element remained, he said, but now the building of the defence and security relationship was “at the heart of the work we are doing together”.
Marles said the pair had used today’s meeting to “put the meat on the bones” of a defence deal – the reciprocal access agreement – that was reached under the former Morrison government. That agreement sets up a legal framework for their forces to train in each other’s territory:
It allows our defence forces to operate in each other’s countries and I think what we will see is more of that. We take this a step at a time.
Marles said that Japan would, for the first time, send aircraft to participate in the Royal Australian Air Force’s Exercise Pitch Black in August. He said that was “emblematic of the kind of activity that we can both engage in going forward”.
From the perspective of Australia, we obviously see Japan as being really important to our strategic future. But what’s been so gratifying about this visit is that that feeling is reciprocated. It’s very clear that from the perspective of Japan, they see their relationship with us in Australia as being one of the highest order. That presents such an enormous opportunity for us to take the relationship forward and we were very pleased to be able to take steps in doing that today.
This all comes days after Marles met with his Chinese counterpart, Wei Fenghe, in Singapore on Sunday, ending a diplomatic freeze of more than two years.
Marles’ trip to Japan appears to be designed, in part, to assert that Australia is not changing its fundamental foreign policy and defence settings.
Marles said:
It is really clear that when times are tough, friends come to the fore. And today, Japan and Australia are the very best of friends.
NSW treasurer Matt Kean to speak on electricity market
The NSW treasurer and energy minister, Matt Kean, will address the media at 5.15pm following the decision to suspend the electricity market. We will bring you that when it comes.
Union calls for review of ‘broken’ national electricity market
The Electrical Trades Union is calling for an independent review of the entire national electricity market (Nem) following the unprecedented decision by the Australian Energy Market Operator (Aemo) to take over national energy supplies.
The union’s acting national secretary, Michael Wright, said:
The ETU has been sounding the alarm about the Nem for years. This vindicates our long-held concerns that the market is broken and beyond repair.
The experiment in synthetic markets, trying to deliver essential public services through profit-motivated, tax-avoiding multinational energy corporations, has failed shockingly.
Gas and coal companies prioritising the export market is just a symptom of a problem, not the cause. The cause is complete regulatory failure.
Prime minister Anthony Albanese and energy minister Chris Bowen now have a clear mandate to step in and order an urgent review of the entire national electricity market.
Even if Aemo’s unprecedented intervention gets us through this acute phase of the crisis, we cannot return to the status quo. There is a serious question of whether the Nem should ever be allowed to resume.
A national review must consider how to remove the dead wood of rampant financialisation and short-termism that now dominates the Nem, which is placing a huge brake on the energy sector’s capacity to improve productivity and efficiency.
AEC confirms South Australia Senate results
Josh Butler
The Australian Electoral Commission has confirmed the Senate results in South Australia, with three Liberals, two Labor and one Greens senator elected.
The preferences have been distributed and the results are in for the South Australian Senate election. The following six individuals have been elected.
1. Simon Birmingham
2. Penny Wong
3. Andrew McLachlan
4. Don Farrell
5. Barbara Pocock
6. Kerrynne Liddle #auspol pic.twitter.com/s9sr3onxfu— AEC ✏️ (@AusElectoralCom) June 15, 2022
As expected, Simon Birmingham, Andrew McLachlan and Kerrynne Liddle will represent the Liberals, with ministers Penny Wong and Don Farrell for the Labor government, and Barbara Pocock for the Greens.
The first five senators on the AEC list were all expected to be elected for some time, but the only possible wildcard was the small possibility of One Nation grabbing the final seat – but that went to Liddle and the Liberals.
It’s also now confirmed that former Senate powerbroker Nick Xenophon has again missed out, after another unsuccessful bid for office. You might remember he quit the Senate in 2017, in a bid to run for the South Australian state parliament, but that didn’t pan out. He announced a late bid to return to the federal Senate shortly before the election, but that too has now been confirmed as unsuccessful.
Xenophon congratulated the winners in a video posted to Twitter.
Westerman says other states not affected by market suspension
Westerman is asked if any other states are facing blackouts – he says they are mainly worried about New South Wales.
Reporter: “Are there any other states that could be facing blackouts?”
What I’m saying is that in NSW in particular, we are concerned about the supply and demand balance for this evening, potentially tomorrow we would urge consumers in NSW only, to conserve energy where it is safe to do so. We are doing everything we can to make sure we have sufficient generation on tap to meet supply.
He said other factors adding to this include: “The effect of the international crisis on gas, coal, availability of coal plants.”
Reporter: “How… do we not get into this situation in the future?”
That is a question for policymakers. It is a policy question, what I’m focused on is making sure we have sufficient electricity to meet customer needs.
Westerman: market will restart when generators co-operate
Westerman says by suspending the market they are creating one simple place where generators can put all their availability and it can be dispatched in a methodical way.
We will restart the market once we are confident the market will co-operate. What we are doing today is suspending the market because we see it is impossible to operate the market under current circumstances, and we will reassess that every day.
Once we are confident we can operate it and not see generators withdrawing their availability then we will restart the market.
Westerman: electricity prices won’t rise as result of market suspension
A reporter has asked if prices will go up because of this – but Westerman says they won’t.
Under market suspension rules we have worked off a pricing schedule reflective of prices over a trailing period, generators will be receiving compensation based on prices over the past month. We will have to check that. So, it’s not true to say that prices would go up under this market suspension mechanism.
Westerman: NSW residents should conserve energy if safe to do so
Westerman is asked if Australians can use normal heating tonight – he said he is asking NSW residents to conserve their energy where it is safe to do so.
Reporter: “Is this the sign that the national electricity market is challenged?”
We are seeing very challenging times, right now we see the market is not able to deal with all the factors thrown at it, frankly those factors are quite extreme, ranging from generators that are both planned and unplanned outages, very high demand, a confluence of factors at hand.
Westerman: generators will have clear process to recover costs
Reporter: “Is this the best possible option?”
Westerman:
We have seen a large amount of generators pull availability from the electricity market facing higher cost, we have faced high demand profiles due to the cold weather, input costs have increased due to the international factors, we have had a few transmission line outages which has resulted in a price rise.
Reporter: “Will generators still be compensated?”
Westerman:
By suspending the market we are putting in a simple process to put in their input and have a clear process to recover their cost.
Aemo boss: first time national market has been suspended
Journalist: “How long do you envisage the suspension to last for?”
Westerman:
We will reinstate the market once we are confident we can operate it, we will reevaluate that on a daily basis.
He is asked how unprecedented this move is:
We suspended the market in Tasmania and South Australia last year so it is a process familiar to market participants. This is the first time it has been done nationally.
Market suspension best for consumers, Aemo says
Westerman says this will deliver the best outcome for Australian consumers.
The suspension of the market is a temporary measure and will be reviewed daily. We will return the market to its normal state once Aemo is confident that we can operate the market again and not see generators withdraw their availability.
Practically, this means we are creating one simple process where generators can put their availability and have a simple, clear process for them to recover their costs. Prior to suspending the market today, Aemo had issued over 5,000 megawatts of directions and that is roughly 20% of demand.
And it is simply not possible to operate the market in this way. These actions today, we are confident will deliver the best outcome for Australian consumers.
Aemo press conference on electricity market situation
Daniel Westerman says today, Aemo has suspended the national electricity market.
This decision was made because it was impossible to operate the system under current conditions while ensuring reliable, secure supply of electricity to Australian homes and businesses. By suspending the market, we are creating a simple process where Aemo has true visibility of which generators are available and when in advance, rather than relying on last minute interventions.
That visibility will help us to manage the system in real-time as well as to understand the balance of supply and demand in the period ahead. Despite this, conditions remain tight in the coming days, in particular in New South Wales where we would urge consumers to conserve energy where it is safe to do so.
We are going now to Adelaide where the chief executive of the Australian Energy Market Operator (Aemo), Daniel Westerman, is speaking …
