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Forced power outage fears

- TOM MINEAR, KIERAN ROONEY

VICTORIA is facing the threat of enforced power outages on Wednesday as the east coast energy crisis widens, although authoritie­s say they are confident the lights will stay on.

The shortfall was forecast after a cap on wholesale prices kicked in for the first time in more than a decade, prompting generators to pull their power out of the market.

The energy giants are now under the microscope of the regulator as they face accusation­s of gaming the system.

Households and businesses are being asked to reconsider any non-essential energy usage amid warnings of a “bumpy” winter for the grid.

The Australian Energy Market Operator (AEMO) was forced to direct generators to come online in Queensland and NSW in an effort to avoid outages on Tuesday night.

A similar interventi­on will likely be required on Wednesday night in Victoria, where there is a shortfall forecast between 6pm and 7.30pm.

The market operator would otherwise turn to “load shedding” as a last resort, which means power would be cut in certain parts of the state for a limited period of time.

Federal Energy Minister Chris Bowen said he was confident there was “enough supply in the system to avoid load shedding”.

“AEMO . . . has avoided any load shedding to this point, and I have confidence they will be able to continue to do that, subject to any further unexpected outages,” Mr Bowen said.

The market operator expects the price cap to remain in place for coming days, after costs soared as a result of outages at coal-fired generators.

But Grattan Institute energy program director Tony Wood said it was not tenable to continue relying on the “circuit-breaker” measure if it meant generators had to keep being directed to put their power into the grid, receiving extra compensati­on as a result.

“If they’re going to go through this peculiar dance every day for the next few weeks, that’s crazy. It was never designed to do that,” Mr Wood said.

“Following the rules of the market when the market can’t respond doesn’t help very much. If this is to continue and it’s not fixing itself, then maybe something more interventi­onist is necessary.”

Victorian Energy Minister Lily D’Ambrosio said when the price cap kicked in, the state lost 2000 megawatts of power, describing it as “strange behaviour” from the energy giants.

“We want to make sure that there isn’t any gaming going on and the way we need to look into that is through the regulator,” Ms D’Ambrosio said.

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