Origin Energy’s response to SA’s ongoing blackouts

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Origin believes it should be given the power to intervene directly in the energy market to prevent widespread blackouts, such as those that have been occurring in South Australia over the past few months.

Due to hot weather this month, SA’s electricity demand reached peak capacity. This caused a loss of power to approximately 90,000 residences at one stage. The Australian Energy Market Operator warned this would happen, but there was a lack of response from energy companies.

“There needs to be greater ability for the operator to trigger operations of those assets,” said Origin Energy chief executive Frank Calabria in a comment to the Sydney Morning Herald.

According to Calabria, the increased use of renewable energy sources has put more pressure on energy providers due its inconsistent output. Back-up power is needed from quick-start generators when there is a shortage of output.

As a result, studies from the Australian Energy Markets Commission are looking into how operation of the electricity market needs to change to ensure energy security in the face of increased renewables.

The SA government also appears to be looking into this, and it has been hinted that new measures will involve some form of payment to energy companies.

Calabria believes that rather than switching to a capacity energy market, where generators are paid to have capacity available (which raises power prices for households), SA will more likely introduce a form of payment that enables capacity to be available in some circumstances.