A massive amount of capacity has been withdrawn from the electricity grid in recent days, triggering compensation payments to power plants to get it back.
Power generators are exploiting the chaotic energy market by withdrawing power supply from the electricity grid, forcing the Australian Energy Market Operator to direct them to fire their plants back up and triggering profitable compensation payments.
But the electricity market is tightly regulated and the AEMO has powers, designed to prevent blackouts, which enable it to force generators to fire up units and start supplying electricity to the grid. Whenever it does this, companies are awarded compensation. “The Australian Energy Regulator reminded [power companies] of their obligations of the law this morning,” Bowen said.
A spokesperson for the Australian Energy Council, which represents major power generators including AGL, EnergyAustralia and Origin, said its members were losing money selling power due to soaring costs of the coal and gas they burn.“The price cap unintentionally means that some plants can’t recover their fuel costs. Participants are legitimately seeking ways to resolve the problem,” the spokesperson said.
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