Energy Minister Chris Bowen is confident the east coast can avoid blackouts and load-shedding because of the swift action of regulators.
A perfect storm of coal-fired power station outages, high demand due to a cold snap, and problems in the global and domestic gas markets, led to fears of blackouts in Queensland, NSW and Victoria.
Mr Bowen said regulators had stepped in and were confident major problems could be avoided.
"It has required AEMO (the market operator) to direct generators to bid into the market to provide the energy system with electricity," he said.
As well, some of the biggest energy users have reduced their demand.
"I do not believe there is a likely outcome at this point that there will be any requirement for load shedding, or indeed, as I said, for blackouts," Mr Bowen said
The Australian Energy Market Operator said in a statement on Tuesday morning it had rolled out price caps in Queensland, NSW, Victoria and South Australia due to wholesale electricity prices reaching a threshold.
As a result, some generators in NSW and Queensland revised their "market availability", which - in addition to coal plants being offline - contributed to forecast supply shortfalls on Tuesday evening.
AEMO issued market notices to encourage more generation to avoid shortfalls on Tuesday night.
"AEMO will continue to monitor reserve conditions closely in Queensland and NSW, and more broadly across the national electricity market, providing further updates should conditions change," it said in a statement.
Mr Bowen said people would not need to turn off their heaters to ease the load on the network, but he recommended items such as swimming pool heaters and filters and outdoor lighting be switched off.
Prime Minister Anthony Albanese earlier said issues had been brewing over a longer period.
"You've had a decade of neglect where we have an energy grid that isn't fit for purpose for the 21st century," Mr Albanese told reporters in Brisbane.
"What we find is that the consequences of the former government's failure to put in place an energy policy is being felt right now with problems in the marketplace because that certainty wasn't available."
The Australian Energy Regulator and competition watchdog are monitoring the situation for anti-competitive behaviour such as price gouging.