The Australian Energy Market Operator (AEMO) has warned of potential blackouts in 2027 as the energy grid is not ready for the closure of the Eraring coal plant.
The largest coal-fired power plant is set to close in 2027, but the energy market operator warned that the New South Wales power system could face system strength deficits. Transgrid is expediting the procurement of synchronous condensers, but there might not be enough synchronous condensers in place before the decommitment of Eraring.
AEMO also singled out Victoria, where emerging system strength needs are anticipated from 2028 to 2029, primarily associated with the planned closure of Yallourn Power Station.
AEMO’s observations are outlined in its 2025 Transition Plan for System Security, a plan to meet system security needs over the next decade to support Australia’s energy transition.
The transition planning framework will help navigate transition points that require investment or material changes in power system operations. This includes managing system strength requirements in New South Wales, first identified by AEMO in 2021, as well as minimum system load risks in Queensland and other states from 2026 onwards.
“The Transition Plan for System Security aims to help guide the sector through the next phase of the energy transition, focusing on the key transition points and actions needed to keep Australia’s main power system stable and secure,” according to AEMO CEO Daniel Westerman.
“The report outlines the steps required to replace the system security services provided by coal plants that are retiring and unlock the growing potential of renewable energy, including rooftop solar, to help deliver a smooth transition for consumers,” he said.
AEMO recommends an increase in emergency distributed PV backstop capacity, particularly in Queensland, to maintain system security and avoid widespread customer impacts in rare but plausible operating conditions.
Consumer energy resources (CER) are becoming increasingly central to system operation, and AEMO is taking steps to continue to encourage CER growth and ensure households and businesses can continue to have a meaningful impact on Australia’s energy transition.
New approaches for system restart are required before traditional providers exit the market. In the short to medium term, strategic investment will be needed to ensure a restart during the transition.