ELECTRICITY supply to western Victorian households has so far been uninterrupted despite speculation that the price cap of $300 megawatts per hour set by the Australian Energy Market Operator (AEMO) this week, could lead to power interruptions.

Western Victoria’s power is distributed by Powercor, with spokesman Jordan Oliver confirming on Wednesday that despite energy security and market pressures culminating in the setting of the price cap, there had been no interruption to supply.

“There’s been no load shedding on the Powercor network overnight (Tuesday night),” he said.

On Tuesday morning, wholesale electricity prices reached the cumulative high price threshold, thus triggering the price cap.

Load shedding occurs when power is turned off to some customers because there is not enough electricity being generated to meet the demand for electricity from homes and businesses.

This may happen for a range of reasons, including a significant increase in electricity usage during weather events for heating or cooling purposes, a technical fault at multiple power stations, or a high voltage transmission line incident.

Despite an abundant energy supply, Australians were advised this week to cut back on electricity usage and resort to critically needed power only with market analysts warning there could be ongoing power security concerns over the winter months.

AEMO’s function is to manage the National Energy Market (NEM), and design and operate a sustainable energy system that provides safe, reliable, and affordable energy.

Its governance comprises 60 per cent government and 40 per cent private representation, however, despite its functions, has not been able to mitigate the confluence of problems that have contributed to energy supply and insecurity that has led to some generation units being taken offline in New South Wales and Queensland this week.

Market analysts including Victorian Energy minister, Lily D’Ambrosio, have blamed the lack of action over many years on the part of the Federal Coalition Government for not leading sooner on an energy transition away from coal fired power to renewables.

 On top of that, the Russian invasion of Ukraine has contributed to global inflationary pressures, and combined with coal fired powered stations that frequently break down, power insecurity has impacted households this week.

Questions hang over market power use for the NEM and the Australian Energy Regulator (AER), who exist to ensure energy consumers are better off, now and in the future.

The AER controls the sector within legislation and works with the Australian Consumer and Competition Commission (ACCC) with a common objective to protect, strengthen and supplement competitive market processes.

The Energy Security Board (ESB) which comprises the heads of the Australian Energy Market Commission (AEMC), the AER and AEMO, is chaired by the head of the AEMC.

The AEMC is the expert energy policy adviser to Australian governments.

The Energy National Cabinet Reform Committee comprises the Commonwealth, Australian states and territories who work together on priority issues of national significance and key reforms in the energy sector.

The nation’s energy ministers established the ESB to coordinate implementation of recommendations from the Independent Review into the Future Security of the NEM.

The ESB also provides whole of system oversight for energy security and reliability to drive better outcomes for consumers.

AEMO has encouraged generators across the NEM through the Lack of Reserve (LOR) notices issued for Queensland, New South Wales, Victoria and South Australia, to bid their availability into the market, rather than waiting to be directed to do so.

AEMO said it will continue to monitor energy reserves and provide further updates.

Australia’s gas market is also experiencing domestic supply and demand balance issues impacting gas prices. 

The AER said it is closely monitoring the wholesale and retail markets to ensure all participants are complying with the law and the rules in the market.

Prices in both electricity and gas have risen sharply in the first quarter of 2022, with higher prices projected to continue throughout the year.