What caused the SA blackout?

There is a lot of confusion and an unconscionable amount of politics swirling around the east coast power crisis today so I’ve tapped my sources to get some facts straight. Here’s what happened in SA:

• the heat wave rolling across the east is testing the grid in every state;
• NSW will be threatened today, coal power-powered QLD has been having brownouts this summer in similar conditions;
• the associated demand surge in SA led to the Australian Energy Market Operator (AEMO), the regulator of the National Energy Market Operator (NEM), detecting a 3% power shortfall;
• prices in the wholesale market rocketed from their usual $70MWH to $14kMWH;
• SA’s Pelican Point gas generator, owned by French giant Engie, was running at half capacity but because the shortfall in power was small, it made a lot more money by not ramping up output than by doing so;
• to fill the deficit, rather than order Engie to ramp output, AEMO ordered the power distributor, South Australia Power Networks (SAPN) owned by HK business magnate Li Ka-shing, to cut power to 40k homes;
• it is unclear how these 40k homes were chosen;
• this is why the SA government is so pissed off. The National Energy Market (NEM) failed and it’s unclear why the regulator allowed it.

Thus the questions that need to be asked today are:

• why did AEMO prefer to cut than ramp gas power? Did it not have the authority to order Engie to boost output or did it make a mistake?
• why did Engie have sufficient market power to not ramp output?
• what structural changes need to be made to the NEM and AEMO so that it does not happen again?.

As you can see, these questions do not have a whole hell of a lot to do with the inherent reliability or otherwise of renewable power nor any shortfall in base load power. For that matter, in this moment of crisis they do not have much to with price of gas, either.

The pressing questions are about market structure, the NEM and functionality of the AEMO as the power mix shifts.

Shame we have no prime minister nor energy minister to ask them.