Recent reductions in wholesale electricity prices could be sustained by connecting more renewables to the grid and more competition in wholesale markets, resulting in savings for customers, TransGrid says.
TransGrid’s Transmission Annual Planning Report 2020 (TAPR) outlines how new transmission infrastructure is essential to unlocking and sharing new generation sources – resulting in lower wholesale prices and a better ability to meet peak demand, as coal power generation is phased out.
After a brief dip in demand for electricity at the height of the COVID-19 slowdown, there is clear momentum and a return to growth forecast in New South Wales.
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TransGrid head of network planning Andrew Kingsmill, said, “Relief from high wholesale prices won’t last without the transformation of the power system, so a commitment is needed to develop more renewable energy sources and improve interconnection to better share existing and new generation.
“Establishing renewable energy zones and integrating new, low-cost generation will increase competition, helping to maintain downward pressure on the wholesale electricity market price and reduce electricity bills,” he said.
According to the TAPR, the summer peak demand of 13,957 MW on February 1, 2020 set a record for the highest weekend demand in NSW. Extreme conditions on four days last summer resulted in a tight supply-demand balance that led to a lack of reserve condition being declared by the Australian Energy Market Operator.
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“Lack of reserve conditions will worsen if we don’t address the tight supply-demand balance. It is essential to progress the transformation of the power system in a timely way. This will avoid excessive reliance on gas peaking generation and market interventions, which place upward pressure on electricity prices,” Mr Kingsmill said.
TransGrid continues to work with governments and regulators to kick-start major projects and innovative solutions, including the development of:
- Central-West Orana Renewable Energy Zone
- EnergyConnect: NSW to SA Interconnector
- Powering Sydney’s Future
- Queensland NSW Interconnector