How do you expect the National Electricity Market to look by about, oh, 2035? Probably very different from today, as a legion of new generation sources replace a handful of grimy old coal plants. The supply side is only going to get more complex, for sure, but don’t be complacent about demand. There is the rise of electric vehicles and electrification of major household appliances to factor in, for starters, not to mention the evolving role for batteries.

The slow reconfiguring of the NEM is a daunting task. How can you arrive at a best-fit future-scenario solution when there is no way of knowing what tomorrow will bring?

It’s a job for the boffins at the network service providers, a few of whom joined a panel discussion in Sydney in February at the Pumped Hydro Energy Storage Conference, chaired by ANU Centre for Sustainable Energy Systems director Professor Andrew Blakers.

More interconnection

“The first thing that is crystal clear is that we need more interconnection,” says AusNet Services head of infrastructure development Dennis Freedman. More interconnection increases opportunities for storage and generation in more locations, he says, which would help stabilise the grid. As for the entrance of EVs, that’s a tough one. At this early stage we can only guess what charging behaviour will look like. One thing is certain, if everyone charges their vehicles on returning from work, grid operators will have a “massive issue” on their hands as the ramp to evening peak demand becomes ever more steep.

“The most critical thing is to plough our way through the regulations and get as much of [AEMO’s] Integrated System Plan built as we can,” Freedman says. “The benefits of that will far outweigh any cost of rushing into things.”

The retirement of coal will leave a significant gap to be filled in a 15-year span, says TasNetworks head of stakeholder relations, community engagement, environment and planning approvals Ben White. “It’s a challenging future – a huge spend – and the biggest question ultimately is what is the impact to the customer, both as receiver of the service and payer of the bills. How do you design a solution that provides the best customer outcome at the lowest possible cost,” White says. “That’s our ultimate challenge.”

Demand side upside

Decarbonisation of the energy system also has significant demand-side implications, says TransGrid future grid manager Fiona Orton. “Once Australia gets past our high energy-cost challenges, Australia will be able to enjoy low-cost energy into the future because we have excellent renewable resources, and we have promising firming capabilities and technology options,” Orton says. “I think that really opens up a whole new world of opportunities for energy-intensive manufacturing. That’s a transformation we really haven’t talked about very much.”

Orton says AEMO may see flat demand for the next 20 years but TransGrid has a different view: economic growth in NSW and the rise of electric vehicles will only see the load tick upwards, although there are positives that some may have overlooked. “By 2040 we might have as much storage driving around within Australia as the whole of the Snowy 2.0 project,” she says on the possibilities of EVs as grid assets, where she sees so many more options about how to balance intermittency of renewables and what services drivers of EVs might be able to offer back to the network in a “two-way energy pathway”.

“I don’t think that demand side has really been taken into account,” she says.

In her role Orton hears concerns about the reliability of the ageing coal fleet and fields questions about back-up generation. She says everyone in the market sees the retirement schedule for coal plants as conservative, so the best plan is to move ahead with the energy transition at a good clip – perhaps faster than has been considered. “That means the transition becomes a lot more challenging, from our perspective.”

Blakers asked what are the prospects for “really serious” interconnections: 5GW to Townsville, 2GW across the desert to Perth, 4GW to South Australia. Will it be planned for or built in a rush as generators fail unexpectedly?

Clever little connections

Taking off his AusNet hat for a moment, Freedman said he suspected there would probably be more efficient ways to invest than “building a massive freeway from one place to another”, such as using smaller interconnected lines that created more opportunities for a larger array of generation and storage facilities.

White, from TasNetworks, concurred. “It’s the tempering of not overbuilding,” he says. “Every prudent transmission business is looking at the next immediate value and opportunity.” The success of the Battery of the Nation concept relies on lowest cost, most reliable, lowest emission-sourced energy being connected to where it is needed most, “and we hope that results in more interconnection between Tasmania and Victoria,” he says.

At TransGrid, Orton sees connection requests from wind and solar developers but she’s well aware a “brand new technology” could come along anytime and want to hook up where no-one had expected. “We need to be as resilient as possible,” she says. “Different generators are likely to want to connect in different locations over the next 20, 30 or 50 years. It’s hard to predict the future when you’re trying to build in as much optionality as possible.”

The good news is you don’t have to travel far from the existing transmission corridors to find excellent wind and solar resources, she says. “We’re interested in doing the cost-effective zones first.”

Policy, please…

Of course, all he panellists mentioned a longing for a strong government mandate for an energy system transformation and decarbonisation. Without this form of momentum in the sector it will be much harder to secure multibillion-dollar projects.

As for satisfying load requirements, the next five years at least will include some tentative moments. Even if tier one projects in the Integrated System Plan were all approved quick-sticks, there is still a three-to-five-year lag as easements and planning permits are negotiated. A lot could go wrong in the meantime, which is why the connecting of the different states is so important.

“It pretty disappointing that a crisis does precipitate a really attractive business case to build out the infrastructure,” Orton says. “We love to think we can plan and build the infrastructure before we have the crisis.”

State energy ministers seem to be largely on-side, however, and the panellists appeared to share some inside knowledge which suggested a year could probably be shaved off completion times for stage one projects in the Integrated System Plan if it meant averting a crisis.

Which isn’t to say we should all relax.