Power companies may anger Australian public opinion

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El laborista Anthony Albanese, primer ministro australiano.
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Prime Minister accuses generators of withholding supply

Australia’s electricity providers are on track to match Wall Street in the financial crisis. The Prime Minister, Anthony Albanese, declared on Friday that the Australian Energy Market Operator (OMEA) had suspended spot operations in the electricity market for the week because generators were withholding supply to “play”. This suspicious behavior can provoke a general reaction at a particularly bad time.

The latest twist in this crisis was brought about by regulators, who imposed a cap on the price for which generators could sell their output. Some of them share responsibility for the increases, as up to a third of the aging and unreliable capacity of Australia’s coal-fired power plants is out of service. Years of bad politics, the war in the Ukraine and the early arrival of winter also play a role.

With no limits on rising input costs, especially coal and gas, generators seemed poised to lose money selling on the market. But is not the case. They can claim compensation for losses when prices are capped. But they get paid more if OMEA asks them to provide more power when it fears a shortfall. Deliberately withdrawing capacity to activate those extra funds would fit Albanese’s description of “play”. It may also constitute an infringement, the energy regulator recalled on Tuesday.

Providers have already been accused of making the market work for them. If they were now arbitrating the rules at the expense of the reliability of the system and, ultimately, of consumers, it would put them at the mercy of Australians, who with their vote for Albanese in the recent general election support faster action against change. climate.

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Existing generators would prefer to be as free of loads as possible to compete in the energy transition. But, as the banks discovered after 2008, drawing public and government opprobrium can lead to fines, extra oversight and years of distraction.