The Australian Energy Market Operator (AEMO) has published its 2021 Inputs, Assumptions and Scenarios Report (IASR) which contains five plausible future energy scenarios ranging from ‘slow change’ to ‘hydrogen superpower’, which will inform AEMO’s 2022 Integrated System Plan (ISP).

The IASR was developed over 10 months of deep collaboration with a broad range of industry participants, governments and consumer representatives.

It reflects stakeholder feedback and significant refinement of inputs and assumptions from workshops, webinars, public forums, other engagements and more than 40 submissions.

AEMO’s Chief System Design Officer, Alex Wonhas, said the five scenarios capture the broad range of plausible futures of the National Electricity Market (NEM) in the coming decades.

“AEMO is grateful for the extensive stakeholder collaboration and input that has informed the five ISP scenarios, along with the latest research, analysis, market trends and policy developments,” Dr Wonhas said.

“Stakeholders had an overwhelming response for scenarios to reflect the observed rapid decarbonisation of the energy sector and pathways to achieve net-zero emissions across the economy.”

Compared to the 2020 ISP scenarios, these scenarios have been refined with respect to the economic and technological change expected over the coming decades.

Specifically, the pace of economy-wide decarbonisation, the ongoing consumer investment in distributed energy resources, and the growth of transport and industry electrification.

The five scenarios are: Slow Change, Steady Progress, Net Zero 2050, Step Change, and Hydrogen Superpower.

“There is no doubt the energy transition is forging ahead. We have tried to capture this through a range of scenarios characterised by the growth of electricity demand and the pace of decarbonisation,” Dr Wonhas shared.

“This has led to the introduction of two central scenarios. One is the ‘steady progress’ scenario with decarbonisation led by existing government policy, corporate abatement goals and continued growth in PV uptake. The other, ‘net-zero’, is driven by accelerating technology-led emission abatement based on extensive research and development, policy and progressive tightening of emission targets to meet an economy-wide net-zero target by 2050.”

“We have also mapped out a progressive ‘hydrogen superpower’ scenario based on a power system to support the development of a renewable hydrogen export economy,” he said.

Dr Wonhas added that AEMO has also significantly improved key inputs, particularly regarding rooftop solar PV installation rates and the estimation of transmission costs, with a new transmission cost database.

The IASR aims to help investors and policymakers decide on prudent investments in generation, transmission and storage, which can minimise the cost of developing, operating and consuming energy. The new report can be accessed here.

AEMO will use these inputs in its future work to identify system improvements in the long-term interests of consumers. Future work includes the 2021 Electricity Statement of Opportunities in August, along with the Draft ISP in December and the next final ISP due in June 2022.