AEMO’s grid forecast update warns of “energy gaps”

Transmission towers against striking red evening sky (far north queensland)
Image: Shutterstock

The Australian Energy Market Operator (AEMO) has released an update to the 2023 National Energy Market Electricity Statement of Opportunities, warning of potential energy gaps in New South Wales, Victoria and South Australia unless there is swift investment and build of renewables projects and the transmission lines to connect them.

However, energy experts say AEMO modelling makes conservative assumptions and that extending the life of the Eraring coal-fired power station in NSW could, in fact, lead to more blackouts.

Related article: New report slams case to keep Eraring on life support

Climate Energy Finance senior energy market analyst and director Tim Buckley said, “The real reliability gap here is the failure of authorities to accelerate the rollout of renewable energy, transmission and grid connections needed to ensure cheap and reliable energy to consumers statewide.

“AEMO models in its May report that NSW reliability has improved relative to 2023, but only if new investments underway in renewable energy, dispatchable capacity, transmission and Consumer Energy Resources (CER) such as rooftop solar and batteries progress as advised. AEMO is not confident of this, and yet it is AEMO itself that is in charge of facilitating connection of these developments to the grid post construction.

“It is beyond time AEMO responded with a level of urgency consistent with tackling the energy, cost of living and climate crises smashing NSW energy households and businesses. These concurrent crises will only be solved by an accelerated transition to firmed renewables and a decarbonised, connected grid.

“We also find in the AEMO report that Transgrid has notified it is another year behind schedule for the commissioning of the full 800MW of Project EnergyConnect—the new electricity transmission line under construction that will connect South Australia and NSW— now delayed to July 2027.

“This development is also key to the transition of the NSW electricity system away from coal-fired power.

“CEF trusts Transgrid’s executives’ bonus scheme is zeroed on the back of this pathetic effort, as the NSW government now reportedly contemplates extending the operation of end-of- life, unreliable mega coal clunker Eraring power station beyond its planned closure date of 2025.

“Our research shows this would involve another $150 million annual coal subsidy to Origin Energy, costing each NSW residence some $150pa to both fund the subsidy and wear the cost of higher wholesale power prices as new firmed renewable electricity capacity is crowded out and undermined by the policy backflip—also a massive disincentive to renewable energy investors.”

Related article: AEMO forecasts reliability gaps, highlights investment need

Nexa Advisory principal Stephanie Bashir said, “If the situation has really changed for technical, not political, reasons in just four months then taxpayers and consumers must have transparency before they pay the $120-150 million a year to keep Eraring open, plus higher electricity bills.

“It is time for AEMO and the NSW government to step up and act with urgency. AEMO manages the connections and commissioning of projects and the NSW government manages the project approvals. These are identified as the biggest roadblocks to getting projects to shovel-ready stage. We are yet to hear a commitment from NSW Planning Minister Paul Scully on the plan to prioritise the outstanding renewable energy projects in the pipeline.”

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