Energy update – electricity reliability looks brighter

Private investment in renewables is heading in the right direction to bring stability to the national electricity network facing the loss of coal-fired power stations. Is it enough?

Electricity consumers can expect improved reliability of supply over the next few years driven by large-scale renewables, increased transmission capacity and reduced peak demand. 

The power regulator, the Australian Energy Market Operator’s (AEMO) latest analysis is spelled out in the 2020 Electricity Statement of Opportunities (ESOO), which predicts a short term reduction of peak demand and energy consumption this summer due to COVID-19.

AEMO Managing Director and Chief Executive Officer, Audrey Zibelman, welcomed the growth of renewables in the lead up to retiring coal-fed power plants but warned of the continuing challenge to the national network and supply.

“It is great to see how industry’s investment in new resources improves the reliability outlook for this summer,” she said, noting an additional 4,300 MW of new variable renewable energy (VRE) capacity will be operational this summer compared to what was available last summer. 

“In future years, the declining reliability of the aging coal fleet and scheduled plant closures contribute to projected increases in unserved energy, particularly in NSW and to some degree in Victoria,” she said. 

However, the shift to non-traditional generators and the increasing take up of household rooftop PV, continues to pose challenges to managing the national network’s voltage, system strength and inertia. 

“To solve these, AEMO is collaborating with industry, jurisdictions and market bodies to develop new standards and to support cost-effective regulatory and market reforms that are required to keep the power system secure and reliable while lowing costs across the energy landscape,” Ms Zibelman said. 

She said the looming loss of two-thirds of current coal-fired power generation can begin in earnest now that the Australian Energy Market Operator has released its 20-year development plan. 

The plan, which has been worked on by AEMO with industry, means network upgrade projects costing billions of dollars must, by law, proceed to completion. Upgraded transmission lines between NSW, Victoria and South Australia will facilitate stability in the system as more renewable energy enters the network. 

In a nutshell, the 2020 Integrated System Plan envisages a National Electricity Market significantly less reliant on coal-fired generation and dominated by distributed energy resources, which is code for rooftop solar, and variable renewable energy, which means grid-scale wind and solar. 

Renewable energy updates

  • South Korea's Hana Financial Investment has acquired a 162-megawatt solar farm to be built in Queensland. The purchase contract for 450 gigawatt-hours a year is one of the country's most substantial renewable energy contracts ever signed. 
  • NSW's New England region is expected to attract investment of almost $13 billion in new wind and solar generation and transmission thanks to the state government's plan to develop a massive $75 million Renewable Energy Zone in the area. 
  • More than $5 billion needs to be spent on electricity transmission to make the most of renewable energy projects – including the newly approved Snowy 2.0 – and avoid having to build more costly gas plants, according to NSW’s privately owned grid operator Transgrid. 
  • Transgrid has proposed a pipeline of regional transmission lines and interstate connectors over the next decade to ease NSW past the closure of the Liddel coal plant in two years' time and smooth the transition to renewable energy.