Australian state grants emergency powers to control energy crisis

The move will allow New South Wales' energy minister to direct the state's private coal companies to operate and add supply to the electricity grid. PHOTO: EPA-EFE

SYDNEY (XINHUA) - The authorities in the Australian state of New South Wales have been granted emergency powers as a "precautionary measure" to ensure the stability of the state's exhausted energy grid.

Mr Matt Kean, Treasurer and Energy Minister for New South Wales - home to Sydney - was granted the powers during an emergency meeting on Thursday (June 16) night. They will allow him to direct the state's private coal companies to operate and add supply to the electricity grid.

Since the beginning of June, a cold snap across Australia's eastern states and the faulty operation of a large number of coal plants have seen gas and energy prices spike and threatened energy shortages and blackouts.

The crisis has further unfolded this week as the national energy regulator, the Australian Energy Market Operator, made the unprecedented move to suspend the National Electricity Market for the first time ever.

"In the current situation suspending the market is the best way to ensure a reliable supply of electricity for Australian homes and businesses," said the operator's chief executive Daniel Westerman while making the announcement.

This meant that power generation companies were barred from selling electricity on the open market and were required to feed the grid directly, with any shortfalls to be reimbursed by the government.

Furthermore, state governments have been urging citizens to reduce their power usage where safe to do so, especially during peak hours between 5pm and 9pm.

While conditions have since stabilised the Australian Energy Market Operator has warned that it was "too early to say when the market will resume normal operations".

The CEO of peak industry body for electricity and natural gas, the Australian Energy Council (AEC), Ms Sarah McNamara, said on Friday that coal plants were progressively coming back online and expected the market to soon stabilise.

"After a period of re-stabilisation, the AEC expects the market to be able to successfully restart without the price cap in place," said Ms McNamara.

"The Australian Energy Council emphasises that this has been an extremely challenging time for all involved in the energy sector, including generators."

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