Renewable energy already powers 40 per cent of the electricity used in homes and businesses along Australia’s east coast, according to the Australian Energy Market Operator(AEMO)’s latest 2024 Electricity Statement of Opportunities (ESOO) report.
The report offered a 10-year outlook on the investment needed to ensure reliable electricity supply across the National Electricity Market (NEM).
It emphasised the critical need for timely and complete delivery of investments in new generation, storage, and transmission infrastructure to avoid potential shortfalls in electricity supply.
Key areas of focus include federal and state government-backed generation projects, actionable transmission developments, and enhanced coordination of consumer energy resources and demand flexibility.
AEMO CEO Daniel Westerman said investments in renewable generation and storage continue to increase, and the pipeline of new projects continues to expand, filling the gaps being left by the retirement of Australia’s ageing coal fired power stations.
“Compared to last year’s report, the reliability outlook has improved, assisted by the progress of 5.7 gigawatts of grid-scale generation and storage, and 365 km of new transmission developments,” he said.
“This progress, along with delivery of transmission projects, a coal plant extension, and higher contribution from rooftop solar, has improved the reliability outlook.”
AEMO said that the delivery of these expected investments is critical. Modelling indicates reliability gaps at times over the next 10 years if these projects are delayed.
These reliability gaps are now projected to be smaller than those forecast previously.
“It is critical that expected investments in generation, storage and transmission are delivered on time and in full,” Westerman said.
“If delays occur to projects already underway or further investment does not materialise, then the outlook for reliability will deteriorate.”
While short-term reliability has improved, AEMO is tendering for off-market reserves in Victoria, New South Wales and South Australia this summer to manage potential low reserve conditions.
Renewable energy leaders celebrated AEMO’s findings.
Tim Buckley, Climate Energy Finance Director said AEMO’s new 10 year ESOO concludes there is no reliability gap until 2034 in any state in the NEM unless there are project delays in the deployment of replacement capacity.
“AEMO forecasts show that power supply reliability levels can be maintained over most of the next 10 years – assuming programs and initiatives already established are delivered on time and in full,” he said.
“We simply need a lot more zero-emissions energy capacity approved and built, particularly utility-scale renewables. Now is the time for urgency and upscaling of ambition by our state governments, particularly given looming end-of-life coal capacity closures.
“The solution to our concurrent energy, cost of living and climate crises is an acceleration of the transition of the energy market to low-cost, clean, reliable firmed renewables at speed and scale.
“State governments need to pick up the pace on project approvals and strategic public-interest investment into firmed renewables to lock in our energy security into the future.”
Marilyne Crestias, Clean Energy Investor Group (CEIG) interim CEO said the group is reassured to see the reliability outlook improving, thanks to Australia’s progress towards commissioning 5.7 gigawatts of new generation and storage capacity and 365 kilometres of transmission in the NEM.
“This is a positive step forward in the energy transition,” she said.
“The bulk of this capacity, 3.9 gigawatts of batteries (13.5 gigawatt-hours of storage), underscores the critical role that battery technology will play in ensuring system reliability as we transition away from coal-fired generation.”
“AEMO’s latest ESOO report highlights the urgent need to deliver new generation and transmission projects to meet reliability standards. This is a clear call to action.”
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