What do you think of AEMO’s 2020 Integrated System Plan? Here’s what EcoGeneration’s energy antenna has picked up so far from its network of experts in solar, storage, academia, government and data-crunching.

Finn Peacock, founder and CEO, SolarQuotes

Almost anyone who has achieved anything hard will tell you that you need to set goals and then every day make decisions that get you closer to that goal. The 2020 ISP gives us the goal to shoot for in its Step Change scenario [consumer-led and technology-led transitions, aggressive global decarbonisation and strong infrastructure commitments]. While the sceptics will claim this scenario is delusional, the progressives must be careful not to claim it will be easy. It’s going to be hard and, in the short-medium term, expensive. For example, we will need a storage miracle to realise the storage requirements. But I’m confident we’ll have a storage miracle this decade, just as we’ve lived through the “cheap PV” miracle over the last decade.

Huon Hoogesteger, managing director, Smart Commercial Solar

As an industry, our experience of AEMO has not been encouraging. AEMO has been a handbrake on solar investments; slow approval times, ambiguous connection requirements, continuous rule changes. In fact, AEMO has made retrospective changes that have decimated the large-scale projects and businesses. They have obliged small inverter systems to have specific and costly capabilities, to assist the grid, which have never been utilised. And they recently complained about solar and wind generators turning off during negative-price market events. I appreciate an integrated plan, but I’m sceptical about AEMO’s ability to execute without adding unnecessary complexity.

Shaun Scallan, head of products, Capricorn Power

When you have a hammer, everything looks like a nail. Is the Renewable Energy Zones (REZ) concept the right underpinning approach for our sustainable energy future? One thing for sure is the transmission business looks very rosy in all the scenarios presented. The distribution of large lumps of variable generation even further away from load seems counter to a real DER [distributed energy resources] strategy, which I would argue puts the generation where the load is. I question the implicit assumption that the supply-demand problem must be solved centrally in a monolithic manner. If you have local energy precincts with extensive local generation that are largely self-supporting, then only demand balancing between adjacent precincts is needed. Here’s a prediction: the pace and scale of true DER deployment will exceed all expectations and make the REZ strategy a burden for the consumer. Let’s go for a simpler approach.

Professor Andrew Blakers, Australia National University

It is good news that the 2020 AEMO ISP includes a Step Change scenario of 90% renewable electricity by the late 2030s. Serious modelling of transmission, storage and other system requirements is being undertaken by AEMO. However, Australia is installing 6GW of new solar PV and wind each year, which already places us on the Step Change scenario path. Since prices for solar and wind will continue to fall during the 2020s, Australia may reach 90% renewable electricity by 2030, and much more rapid implementation of the Step Change plans will be required.

Dr Oliver Hartley, managing director, Epho Commercial Solar Energy

AEMO’s ISP is an invaluable map that allows the energy industry and users to make choices and understand where these choices lead. We need to clearly state where we want to end up on this map, namely the path called Step Change. However, along this path significant network infrastructure projects will be required. While these projects are being executed, we will see the advent of urban solar power stations, which can be rolled out fast, without any environmental impact, close to demand and on a scale of tens of megawatts for individual industrial precincts leading to a higher contribution of DER sooner. We will travel down some ISP roads faster than predicted.

Dr Bjorn Sturmberg, research leader battery storage and grid integration program, Australian National University

I’m hopeful we can follow the ISP Step Change trajectory due, in part, to the growth of two types of battery storage. The first are community batteries installed in the distribution network to manage network stresses – including from air-conditioners and solar – and provide backup power during natural disasters. The second are electric vehicle batteries which, using vehicle-to-grid technology, can support the grid and/or power homes for multiple days. Realising the full value of these batteries requires market updates (discussed in the ISP) that reward flexibility, dispatchability and increasingly locality. With deployments increasing I expect these batteries to be mainstream in the 2022 ISP, contributing to an accelerated transition.

Iain Stewart, founder, Exergenics

The projected increase in DER presents an interesting challenge for the grid. What many consumers do not realise is that rooftop PV systems can be remotely throttled or disconnected when frequency deviates too far from 50Hz to protect appliances connected to the grid. What is needed, alongside greater battery uptake, is to remove barriers to demand-side participation in the market which could better utilise existing infrastructure. By investing in innovative technologies that increase demand flexibility, and creating the necessary regulatory frameworks, we can maximise the utilisation factor of the enormous projected increase in solar capacity.

Tristan Edis, director analysis and advisory, Green Energy Markets

Users of the ISP need to recognise that the Central scenario [where the pace of transition is determined by market forces under current federal and state government policies] is not the scenario we want to be planning for. It involves governments introducing no new policies to reduce emissions and equals failure in terms of Australia meeting its Paris climate commitments. If Australian governments are genuinely serious about these commitments, we really need to get cracking with building the infrastructure to ensure reliable electricity as coal power plants shut down and developing markets in demand management. To date we’ve been moving at a snail’s pace and are fast running out of time.

Amar Rathore, senior electrical engineer, ACT Government

To quote author Alan Lakein, “Planning is bringing the future into the present so that you can do something about it now.” AEMO’s 2020 Integrated System Plan provides a comprehensive plan for the National Electricity Market. The NEM power system will be undergoing a huge transformation and will require innovative solutions. There is an urgent need for better management of customer-owned distributed energy resources to utilise their full potential. The biggest challenge will be managing the increasing levels of system automation. Having appropriately trained multi-disciplinary teams will help in managing complex challenges of climate change and cyber security.

Nick Engerer, CTO, Solcast

Solcast recognises the ISP document as a welcome vision for the solar powered future, but with the execution of the plan come extraordinary technical challenges for operating the energy market and electricity system. One example of a technical challenge is the need for better weather forecasts, as the weather increasingly becomes our fuel source. Thankfully, ARENA has recently funded a project on ’nowcasting’ the weather in South Australia, which will set precedent for other regions of the NEM in the near future. 

Will Mosley, head of business development, RayGen Resources

The ISP, and its support for Renewable Energy Zones, represents a transition for the renewable energy industry. Our focus has been on reducing the cost of energy generation; we now need to focus on reducing the total cost of energy delivered to customers. Poles and wires account for more than half of an end customer’s energy bill, so we need to ensure the highest utilisation of new transmission infrastructure. We cannot continue developing variable renewable energy (VRE) projects that under-utilise expensive grid capacity and offer few levers to respond to changes in market pricing. As shown by this ISP, there is substantial new capacity required for medium-duration storage (two to 24 hours) in VRE zones, that “act predominantly as intra-day energy shifters”. Only by co-locating VRE with medium/long-duration storage can we utilise this large investment paid by Australia’s households and businesses.

Gilles Walgenwitz, general manager energy markets, Energetics

With the fast transition to a high penetration of intermittent wind and solar generation with zero marginal operating cost, and the additional uncertainty related to Australia’s economic recovery from covid-19, the scenario-based analysis carried out in the AEMO’s second ISP is critical. As an integrated resource planning tool, the ISP helps identify the least cost investments necessary for power supply capacity, network augmentation and their related investment triggers. This is especially important in the energy-only NEM, where the “missing money” problem is significant and market reforms are underway. Energetics leverages these supply-demand scenarios and combines them with our own evaluation of possible market reforms to forecast plausible price series and support our advice to sellers and buyers in quantifying market risks and opportunities in both the physical and financial electricity markets.

Lumi Adisa, lead consultant market analysis and business development, Cornwall Insight Australia

AEMO’s Integrated System Plan lays out a clear plan for the NEM’s transition as we look to replace around 18GW of generation capacity set to retire by 2040. In NSW and Queensland alone, the Step Change scenario – which many believe is more reflective of the future NEM – suggests over 16GW of new renewables would be required in each state by 2040. Achieving this amount of new investments is no small feat given the current state of the market; whilst wind and solar make up about 9% and 3% of the total generation mix in the NEM, they have been subject to numerous grid security-related constraints. This, combined with a continuing trend of lower average prices (as more new renewable generation connects), means investors and developers would have to look a bit more closely than they have in the past for good value in the market. Let’s also not forget that for successful implementation of the ISP and to get the most out of the REZs, a fair amount of new transmission and network upgrades would be required, which means regulation would also have to move at an unprecedented pace. A lot to look forward to in the coming years.