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Energy economists are calling for change, so what can Queensland do to avoid future blackouts?

An energy economist is calling for an independent inquiry into Queensland’s energy production following millions of households being told to conserve power for a second consecutive night due to generators reducing their output in response to a cap on prices.

The Australian Energy Market Operator (AEMO) ordered power generators to cover projected electricity supply shortfalls again last night, after a perfect storm of energy chaos in Queensland and New South Wales, including cold weather, offline generators and soaring power prices.

Victoria Energy Policy Center director Bruce Mountain said Australia was in an “absolute market crisis”.

Professor Mountain said generators are largely shielded from volatile spot prices (the market value for energy) and effectively holding production to drive up prices.

“Nothing like this has been experienced in Australia,” Professor Mountain said.

“What’s really going on, I suspect, is bullying by the coal and gas producers – they’re pointing to the spot prices.”

Bruce Mountain thinks there should be an inquiry into current energy shortages.(ABC News)

He said most generators secure their fuel through contracts with the price locked in months in advance.

“I suspect this is quite possibly a very serious case of market cornering,” Professor Mountain said.

“We need an independent inquiry into the extent to which their production is affected by spot prices.

“Serious government action is needed now.”

Why are some generators turned off?

Because the AEMO has set a fixed price cap for consumers at $300 a megawatt hour, some generators have with drawn supply from the market.

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