AEMO update highlights need for more renewables, long-duration storage and transmission

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The Australian Energy Market Operator (AEMO) has released an update to the 2022 Electricity Statement of Opportunities (ESOO) report, confirming the urgent need for investment in generation, long-duration storage and transmission to achieve reliability requirements over the next decade.

AEMO CEO Daniel Westerman said the update reiterated the need for timely investment in generation, long-duration storage and transmission to fill forecast reliability gaps as Australia accelerated its transition away from coal generation.

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“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,” Westerman said.

“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% 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.

Since the 2022 ESOO, 1,326MW of wind and 461MW (604MWh) of battery storage projects across the NEM have met AEMO’s commitment criteria. 

Strengthening near-term reliability forecasts is the delayed closure of the Osborne Power Station (SA), the newly committed Bolivar Power Station (SA), and Waratah Super Battery (NSW) with associated transmission upgrades and system integrity and protection scheme (SIPS).

The SIPS provides a virtual transmission solution that unlocks capacity in the existing transmission system, allowing electricity consumers in the Sydney, Newcastle and Wollongong demand centres to access more energy from existing generators. 

“The NEM has a strong pipeline of proposed generation and storage projects, totalling three times today’s generation capacity, with large-scale solar, wind and batteries accounting for 86%,” Westerman said.

“Investment in firming generation, such as pumped hydro, gas and long-duration batteries, is critical to complement our growing fleet of weather-dependent renewable generation to meet electricity demand without coal generation,” he said.

The report was welcomed by the Climate Council.

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“Australia is switching to a clean, affordable energy system that delivers lower prices for households and businesses as well as fewer greenhouse gas emissions,” Climate Council senior researcher Dr Carl Tidemann said. 

“Clean and affordable renewable energy is doing the heavy lifting when it comes to ensuring a reliable supply of electricity in the National Electricity Market. The way we use energy has already changed, and we need an electricity system that meets our needs today as well as those well into the future. With the right government support, we can rapidly roll out more renewable generation, storage and grid infrastructure that will enable a reliable energy grid powered by 100% renewables,” Dr Tidemann said. 

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