The report highlighted a low risk of electricity shortfalls for an average summer in 2017/18, however, it said the power system remains susceptible to extreme conditions.
“The power system is changing, and this latest analysis indicates there will be challenges that will need to be managed proactively on days of extreme conditions to maintain secure, reliable and affordable energy to Australian consumers,” AEMO chief executive officer Audrey Zibelman said.
The ESO outlined the reliability standard set by the Australian Energy Market Commission (AEMC) would be met within all National Electricity Market (NEM) regions over the next two years, however a risk of supply shortfalls exist should there be failures or limitations on generation or transmission; or low wind and photovoltaic (PV) generation conditions coincide with very high demand across South Australia and Victoria at the time of peak demand in the day.
“The security of the power system will be tested on extremely hot summer afternoons and evenings when consumer demand is highest, with the risk increasing if, at the same time, wind and photovoltaic (PV) generation drops to low levels, other generation stops unexpectedly, or electricity flow is constrained between regions,” the report said.
“In this assessment, South Australia is considered most at risk of breaching the reliability standard.
“To meet the standard, existing generation capacity must be available and operating, Pelican Point Power Station must return to full service, and the new battery storage and diesel generation contracted for by the government must be available as planned.”
Ms Zibelman said the reliability standard is a “strong planning benchmark” for the industry, but doesn’t assure consumers will have power when they need it most.
“AEMO is collaborating closely with governments and market participants to evolve capacity within the power system to meet peak demand during critical summer periods for the immediate two year horizon,” she said.
The report also revealed gas supply remained tight since the release of AEMO’s Gas Statement of Opportunities report, but the latest industry projections of gas production were sufficient to meet current projections of gas demand.
“Gas availability on the supply side, together with new initiatives to reduce peak demand via demand side management, will form a formidable combination in managing power system security during those hours on the very few extreme condition days per year,” Ms Zibelman said.
AEMO aims to publish a further update to the ESO in August.