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Posted: 2022-06-15 04:32:54

South Australia's government says the state should not suffer any power blackouts today, despite the market operator previously warning of potential outages.

Warnings of blackouts have hung across the country this week amid the national energy crisis.

Energy Minister Tom Koutsantonis was energy minister in 2016 when SA suffered a statewide blackout and when power outages were ordered in 2017 to secure the network in the middle of summer.

He said while the market operator's warnings gave many South Australians flashbacks to that time the current situation was different.

This time, the predicted shortfall has been forecast due to generators withholding supply after the Australian Energy Market Operator (AEMO) put a price cap on the wholesale price of electricity in some states including South Australia.

On top of that, some coal-fired power stations on the east coast have been offline for maintenance.

A man wearing a suit and tie gesticulates while speaking to microphones
South Australia's Energy Minister Tom Koutsantonis is confident the state will avoid blackouts amid the national energy crisis.(ABC News: Lincoln Rothall)

But the AEMO can direct privately owned generators to turn back on when needed, meaning South Australia should avoid any blackouts.

Mr Koutsantonis said some companies were taking advantage of the fact the AEMO paid compensation when they directed generators to turn on.

"Because AEMO have put in price controls, they're now deliberately withdrawing their supply in order to get directed on so they can earn more money," he told ABC Radio Adelaide.

"Now in anyone's language, no matter your politics, that's not a market.

In a statement published on their website today, the AEMO said it was continuing to "encourage" generators to bid their availability into the market, rather than directing them to do so.

Mr Koutsantonis said while generators and retailers were acting in the best interests of their shareholders, overall change to the system was needed.

"Every player is acting rationally under the rules, but when you look at the rules collectively it's a fiasco," he said.

Backup power unavailable

Following the rolling blackouts in 2017, the then Labor Government purchased diesel generators to reduce the risk of power outages in summer.

They were privatised by the former Liberal government when it took office.

The state government says that decision means that it cannot access them through this current period of uncertainty.

"They [the former Liberal government] signed a contract with this new privatised entity to only be available for emergency responses in summer," Mr Koutsantonis said.

A man in a black suit, pink shirt and purple tie stands looking seriously at the camera
Opposition spokesman Stephen Patterson.(ABC News)

"Now it's winter, we don't have access to that 250 megawatts."

Opposition spokesman Stephen Patterson defended the decision to privatise the generators.

"They are available on demand when required ... and run at other times to lower the cost of electricity," Mr Patterson said.

He again criticised the state government's decision to cut renewable energy schemes in its recent budget.

"We're left with a serious case of escalating prices, forecast rolling blackouts and no short-term plans in place by the Labor government," he said.

Legislation needed to improve transparency

Mr Koutsantonis said some generators would have secured gas supplies below the existing market rate, but were charging for power based on current prices that have sky-rocketed.

He said the state government was introducing legislation to improve transparency across the system and allow regulators to view contract details.

"All we want to know is, how much gas do you have stored in your pipelines, [and] how much did you pay for it?" he said.

"So when you put into your gas-fired power station we know exactly how much you should be charging to get a return."

Any legislation would need to be agreed upon by all other jurisdictions, but Mr Koutsantonis said he believed the national desire to fix the issue was "being strengthened every minute".

"I think last night was probably the saddest chapter in the Australian energy market's history," he said.

"The idea that Australian generators, who are buying Australian gas and Australian fuel, are not bidding into the market to provide Australian customers with their power is a national disgrace."

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