Grattan Institute energy director Tony Wood said the market intervention by the Australian Energy Market Operator (AEMO) would generate significant extra costs that will eventually be borne by households and businesses.
“There are two hard issues to address here. One is how much compensation was paid to power companies? The second is that while consumers will pay for the compensation,how much will it cost and when is that going to be?” Wood said.
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The grid was plunged into chaos from the start of last week when companies withdrew offers to supply massive slabs of power - up to one-fifth of typical electricity demand - supply across the grid.
To avoid blackouts the operator exercised rarely used powers to override the companies’ withdrawals and directed them to fire up their generators to ensure the lights stayed on across the eastern seaboard.
But this process,which has never been used on such a big scale in the two decades of the energy market’s history,triggered compensation payments to the energy companies.
AEMO’s last significant market intervention was in the summer of 2017-18,which cost $50 million in compensation payments.