The ongoing loss of reliability and projected coal plant closures highlighted in the Australian Energy Market Operator’s (AEMO) 10-year outlook report — 2023 Electricity Statement of Opportunities (ESOO) — shows the level of urgency for the energy transition.
The report indicates that pending clean energy projects need to be actioned immediately to maintain the reliability of Australia’s energy system.
AEMO CEO Daniel Westerman said: “This year’s report highlights the pace of Australia’s energy transition and the urgency needed to deliver new investment to ensure reliable, affordable and cleaner energy for consumers.
“Over the 10-year outlook, we continue to forecast reliability gaps, which are mostly due to the expectation that 62 per cent of today’s coal fleet will retire by 2033.
“To ensure Australian consumers continue to have access to reliable electricity supplies, it’s critical that planned investments in transmission, generation and storage projects are urgently delivered,” he said.
In the next 10 years, electricity consumption and peak demand are predicted to grow due to population growth and economic activity, but also the electrification (fuel switching) across all sectors of the economy, including transportation and residential heating and cooking.
Compared to last summer, around 3.4 GW of new generation and storage capacity is expected to be available this summer, which is forecast to be hotter than previous years, meaning electricity demand may be higher than observed in recent years.
“We’re expecting an elevated level of risk compared to recent years, mostly due to hotter and drier conditions, and coal-fired generation reliability is at historic lows,” Mr Westerman said.
“The entire industry is focused on managing the risks in the summer ahead, particularly during high-demand periods coupled with generation outages and low renewable output, but some risk will remain.
“In the longer term, AEMO will continue to collaborate with industry and governments to deliver energy projects to maintain reliable and affordable electricity for all consumers,” he said.
Considering only existing, committed and anticipated projects as per the ESOO’s ‘central scenario’, reliability risks are forecast to exceed the relevant reliability standard in Victoria from this summer, in New South Wales from 2025-26, South Australia this summer and then again from 2028-29 and Queensland from 2029-30.
Climate Councillor and energy expert Andrew Stock said: “Critical to this transition are not only sources like wind and solar but also supporting technologies like advanced batteries and efficient transmission lines that can bring this generated energy to where it’s most needed.
“With a wealth of clean energy projects ready for implementation, Australia has no excuse for inaction. The consequences of maintaining our dependence on unreliable fossil fuels is a future fraught with climate and energy instability and risk. By industry, governments and communities working together to accelerate renewables, storage and transmission, Australia will ensure its energy future is both clean and reliable.”
