On Monday night,the national energy regulator,the Australian Energy Market Operator (AEMO),issued a statement warning that if gas at the Iona plant continued to be drained at the current rate,it could be forced to step in to guarantee gas supply for electricity generators.
“AEMO has determined that there is a possibility that market or operational responses may prove insufficient to alleviate the threat. AEMO is considering all other possible options prior to intervening,” it said.
Last month,the AEMO made the unprecedented decision to brieflysuspend the whole east-coast electricity market to restore calm to the volatile system.
Victoria is the only state in which a $40-per-gigajoule price cap on gas remains in place to keep a lid on soaring wholesale prices.
The cap,which was triggered automatically at the end of May under Australia’s gas market rules,prompted NSW and Queensland to get more of their gas from the Iona plant,which is the largest independent provider of storage services to the east-coast gas market.
The uptick in demand caused storage at the plant to drop from 48 per cent to 43 per cent in a week. The looming supply crunch prompted the AEMO to issue a “threat to system security” notice in a bid to prevent supply shortfalls this winter.