Prime Minister Anthony Albanese has accused energy generators of “gaming” the system and taking advantage of the ongoing crisis that was a hot topic at Friday’s national cabinet meeting.

The Australian Energy Market Operator said it expected there would be enough power supply to meet demand during the coming weekend despite recent issues plaguing the network.

AEMO – which took the unprecedented step this week of taking control of directing supplies from energy generators to the east coast power grid until further notice – said while issues remained in the sector, conditions had improved.

“AEMO can confirm sufficient electricity supply can be made available to meet forecast demand over the weekend across all regions in the national electricity market,” the operator said in a statement on Friday.

“Challenges remain in the energy sector and AEMO will continue to monitor supply levels and risks across all regions.”

This week’s supply shortages came as some generators withdrew from the market after AEMO capped soaring power prices. The operators were then ordered to pump power into the network, and await compensation.

Mr Albanese said disincentives had been built into the power market for generators.

“There was a bit of gaming going on of the system, which is why AEMO used its tools at its disposal to intervene, so we do have these short-term issues,” he said.

He has already flagged that he will seek to rewrite the rules on operation of the energy market to prevent a repeat of this week’s brinksmanship when energy generators held back on supply.

Mr Albanese said the AEMO action would last as long as needed, but collaboration between jurisdictions would be essential in lessening the impacts of the power shortages.

“The states and territories, of course, all have a role to play,” he told Sky News on Friday.

“Gas will continue to play a role in the future as we transition, gas will be important in providing that security for the system.”

Meanwhile, after days of threatened blackouts in NSW, state Treasurer Matt Kean has been granted emergency “precautionary” powers to ensure energy supply in the state.

The risk of outages, as well as routine power plant maintenance, have repeatedly strained NSW energy supplies this week. On Wednesday,  Mr Kean urged residents to reduce use, stoking fears of shortages.

On Friday, he said he had received “very good news” from AEMO in morning discussions that conditions in the state’s power system were much better.

Mr Keen said more generators had come online, including one that had added 680 megawatts to the system. Another generator would come online on Saturday, further bolstering reserve capacity.

“AEMO have described the energy situation as much healthier,” he said.

The powers would remain on stand-by if there was an unexpected change to the situation, including issues with fuel security or logistical problems getting fuel to the site of generators.

“We want to make sure we’ve got everything in our tool kit to keep the system running and get through this period,” Mr Kean said.

NSW Premier Dominic Perrottet confirmed on Friday that Mr Kean now had more power to intervene in the market to shore up state energy supplies.

The powers will reportedly give the Perrottet government the ability to force coal companies to supply power generators with fuel.

“These are steps that we’ve taken just as a precautionary approach,” Mr Perrottet said in Canberra ahead of Friday’s meeting of state and territory leaders with Mr Albanese.

“These aren’t new approaches, we’ve done that in the past and the advice we have at the moment is that … he can direct if he needs to.”

Asked about Canberra’s role in solving the crisis, Mr Perrottet said each state faced energy challenges but the federal government should coordinate responses nationally.

“The national cabinet certainly has a role to play,” he said.

Queensland, the ACT, Victoria and South Australia have also faced blackout threats this week.

Victoria’s Energy Minister Lily D’Ambrosio said her state could be confident about supplies after AEMO’s intervention.

“We need to just make sure that those reserves are actually channelled back into our system so that Victorians can continue to rely on that power,” she said on Friday.

Western Australian Premier Mark McGowan told the ABC the east coast should follow his state’s lead to introduce laws to force companies to retain some supply for domestic use.

WA introduced a mechanism in 2006 that required future gas projects to keep at least 15 per cent of what they produced for local use.

Mr McGowan said similar laws would have averted this week’s crisis if they were available on the east coast.

Victoria has also backed a domestic reserve, with the state’s Energy Minister, Lily D’Ambrosio, insisting this week’s crisis was not a supply issue.

“AEMO have advised that we continue to have sufficient energy reserves,” she said.

“It is disappointing energy generators were potentially gaming the system … this behaviour is unacceptable and will be investigated.”

Pressure on the grid is expected to ease from Friday and through the weekend, as more power units come back online.

Federal Energy Minister Chris Bowen has said AEMO’s decision to take control of the market was the best option for households.

-with AAP