There is an urgent need for investment in renewable generation, long-duration storage and transmission to ensure Australia can meet reliability requirements over the next decade.
This is according to the updated 2022 Electricity Statement of Opportunities (ESOO) report released by the Australian Energy Market Operator (AEMO).
The report provides a reliability update based on changes to generation capacity with the aim of ensuring timely investment to fill any forecasted gaps created by the country’s shift away from coal power.
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The report identifies two increases to reliability risks, namely:
- Increased risk in South Australia and Victoria from 2026-27, when Torrens Island B in South Australia is now expected to retire. Forecast reliability risks increase further from 2028-29 in Victoria when Yallourn Power Station is expected to retire, and in South Australia from 2030-31 when numerous gas-fired power stations are expected to retire.
- Increased risk in New South Wales in 2023-24 due to the advised delay to the commissioning of the Kurri Kurri gas-powered generator.
AEMO CEO Daniel Westerman said in a statement: “Since publishing the 2022 ESOO, short-term forecast reliability gaps in South Australia (2023-24) and Victoria (2024-25) have been filled by new gas, wind and battery developments, along with a delay to the retirement of an existing gas generator.”
“Reliability gaps begin to emerge against the Interim Reliability Measure from 2025 onwards. These gaps widen until all mainland states in the NEM are forecast to breach the reliability standard from 2027 onwards, with at least five coal power stations totalling approximately 13 per cent of the NEM’s total capacity expected to retire.
“Urgent and ongoing investment in renewable energy, long-duration storage and transmission is needed to reliably meet demand from Australian homes and businesses,” he said.
Westerman reiterated that investment in firming generation, such as pumped hydro, gas and long-duration storage will be critical to combat renewable intermittency and meet electricity demand without coal-fired power.
The updated ESOO report also highlights the risk of events when electricity demand may exceed supply, such as in the case of extreme weather and generation and transmission outages.
Westerman added that: “The NEM has a strong pipeline of proposed generation and storage projects, totalling three times today’s generation capacity,” and AEMO will continue to work with governments, industry and the community to manage risks as the power system transitions from coal.