South Australia’s Temporary Fix for Summer Power Reliability

A New Rule Change is Helping Keep the Lights on in South Australia This Summer

Here’s what you need to know.

What’s Going On?

South Australia is facing a potential electricity shortage this summer, and the Australian Energy Market Commission (AEMC) has stepped in with a temporary solution. They’ve approved a rule change that allows the Australian Energy Market Operator (AEMO) to use two specific power plants—Snuggery and Port Lincoln—as emergency reserves.

These plants, owned by ENGIE, were temporarily shut down earlier this year and weren’t supposed to be used again. But with the risk of power shortages looming, the AEMC has made an exception.

Why Is This Happening?

There are a few reasons why this rule change was needed:

• Power Plants Were Shut Down: The Snuggery and Port Lincoln plants were “mothballed” (temporarily closed) in July 2024 and were set to permanently close by 2028. Restarting them takes about 90 days, so they’re not quick to bring back online.
• Reliability Concerns: AEMO updated its forecasts and found that South Australia might not have enough electricity to meet demand this summer.
• Not Enough Emergency Reserves: AEMO tried to secure other emergency power sources but didn’t get enough responses.

This combination of factors created an urgent need for action.

What Does the Rule Change Do?

The rule change gives AEMO the ability to consider using the Snuggery and Port Lincoln plants as emergency reserves, even though they don’t normally qualify under the current rules.

• Temporary Exemption: Normally, power plants that have been active in the market within the last 12 months can’t be used as emergency reserves. This rule change creates a one-off exemption for these two plants.
• Time Limit: The exemption only lasts until 31 March 2025, so it’s strictly a short-term fix.

How Was This Decision Made?

The rule change was fast-tracked because of the urgent risk to the electricity supply. Here’s how it unfolded:

• Minister’s Request: The South Australian Minister for Energy and Mining, Tom Koutsantonis, asked for the rule change to help avoid power shortages this summer.
• No Objections: No one opposed the fast-track process, so the AEMC was able to make the decision quickly.
• Focus on Consumers: AEMO must consider what’s best for consumers when deciding whether to use these plants as emergency reserves.

What Happens Next?

AEMO will now decide whether to actually use the Snuggery and Port Lincoln plants as emergency reserves. If they do, it’ll be done under strict guidelines to ensure it’s in the best interest of consumers.

This rule change is a temporary solution to a pressing problem. It’s not a long-term fix, but it should help keep the lights on in South Australia this summer.

The Bigger Picture

While this rule change addresses an immediate issue, it also highlights the challenges of transitioning to a more sustainable energy system. As older power plants close, ensuring a reliable electricity supply becomes more complex.

For now, though, this temporary fix is a practical step to help South Australia get through the summer without major disruptions.

Source: AEMC Rule Change Details