Australian power station fire will not worsen energy crisis -market operator

© Reuters. FILE PHOTO: The Liddell coal-fired power station is pictured in the Hunter Valley, north of Sydney, Australia, April 9, 2017. REUTERS/Jason Reed/File Photo/File Photo

SYDNEY (Reuters) -A fire that ripped through a New South Wales power station on the weekend will not affect electricity supply, the Australian Energy Market Operator (AEMO) said on Sunday, ruling out a worsening of the energy crisis gripping the country's east.

Supply has been stretched since mid-May in the heavily populated east, with about 25% of 23,000 megawatt (MW) of coal-fired capacity taken offline for maintenance or unplanned outages. Coal supply disruptions and surging global prices of coal and gas have exacerbated the situation.

The AEMO, which manages electricity and gas systems and markets nationwide, said on Friday there was enough electricity supply to meet forecast demand over the weekend, easing the immediate concern of potential east coast blackouts.

Late on Saturday, the agency said on Twitter (NYSE:TWTR) it was aware of a "substation fire" at the Tallawarra power station, at Yallah, a suburb of Wollongong, a city about 80 km (50 miles) south of Sydney, but said the blaze was not expected to further strain power supply.

"We would like to reassure customers in (New South Wales) that this will not impact the electricity supply," AEMO said.

The blaze resulted from mechanical failure in a redundant transformer, fire authorities said, with more than 60 firefighters working to bring it under control.

More than 10,000 litres (2,600 gallons) of oil caught fire, and putting out the blaze is likely to take several days, news website Nine said.

New South Wales Treasurer Matt Kean said conditions in the energy market were looking strong after another power generator came back online on Saturday night.

"There is more than enough supply to meet demand for the foreseeable future, and that's the advice of the AEMO," Kean told reporters in Sydney on Sunday.

On Wednesday, the AEMO suspended the national electricity market, taking control of supply and pricing in an unprecedented step backed by Prime Minister Anthony Albanese, who said it was needed to curb "gaming" of the system.

Since then, coal-fired generators have brought 1,900 MW of capacity back on line, the Australian Energy Council has said, reducing blackout risks.