THE SQUIZ
The Australian Energy Market Operator (AEMO) has shut down the electricity market to secure the supply of power to the National Electricity Market. The unprecedented step has been taken to ensure those who live in Australia’s east and southeast have enough electricity to keep their lights/heaters on. Some say it’s a sensible short-term measure to bring calm to an increasingly volatile situation, but critics say it’s evidence that Australia’s major energy market has failed.

LOOK, I REALLY WANT TO UNDERSTAND THIS BUT…
We hear you, so let’s break it down.

• What’s AEMO? (The cool kids say ‘ay-ee-mow’…) It’s an independent government organisation that’s like a traffic controller. It monitors most of the nation’s electricity consumption and the power generators’ supply across the system. It also controls the National Electricity Market.

• What’s the National Electricity Market (NEM)? That’s like asking what a food market is… It’s the system that covers power generation, distribution/transmission, and selling power to us, the consumer. In Oz, the NEM covers 5 interconnected states: Queensland, New South Wales, the ACT, South Oz, Victoria, and Tassie.

• And who are the power generators? They are companies like AGL (aka Australia’s biggest), Origin Energy and Energy Australia, producing electricity to sell to the wholesale market. Those companies also sell electricity to us schmucks via the retail market, but not all generators do that.

SO WHAT’S BEEN SHUT DOWN AND WHY?
AEMO has shut down the NEM’s spot market. So to explain… It’s hard to store electricity, so the generators make offers to supply X amount of electricity at X price for X time, and AEMO decides which companies get the gig. Recently, there’s been concerns about getting enough supply – and there are a few reasons for that, including the huge prices for coal and gas, which fire the plants. Long story short, AEMO intervened in Queensland and NSW on Monday. And yesterday, it seized control of the whole market to get “true visibility” from the generators about their capacity to pump more power into the grid. SA’s Energy Minister Tom Koutsantonis tweeted that it was “unprecedented action to meet an unprecedented crisis.” But Federal Coalition leader Peter Dutton says the newly minted Albanese Government is out of its depth. “I worry that they don’t know which levers to pull,” he said. PM Anthony Albanese and his Energy Minister Chris Bowen are holding crisis meetings with key players today.