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  • Rikki Lambert

Energy market will fall short in 2027 without coal subsitute: AEMO

More homework and action needed on preventing blackouts?

The Australia Energy Market Operator says a failure to replace decommissioned coal fired power will leave the market short unless replacement energy projects are fast-tracked.

New generation, transmission lines and energy storage are needed to keep the lights on in homes and businesses, the Operator says but Energy Minister Chris Bowen has reassured Australians work is being done to ensure blackouts are not a future inevitability. 

AEMO chief executive Daniel Westerman said timely investment in the grid was needed as Australia ended traditional dependency on coal-fired generation and faced delays on some major projects.

Previously forecast short-term reliability gaps in South Australia and Victoria have been filled by new gas, wind and battery developments, along with a delay to the retirement of a gas generator, the report found.

But mainland states in the national electricity market are forecast to breach the reliability standard from 2027 onwards, with at least five coal-fired power stations - totalling 13 per cent of the market's capacity - expected to retire.

Mr Bowen told national radio that AEMO was not suggesting Australians should expect blackouts in future but there was "much more work" to be done to close gaps in the system: 

"This task is very significant, of course it is, but the progress we've made so far I'm pleased with (but) not yet satisfied with because we have a lot more to do.
"This transition to renewable energy needs to be faster than it has been over the last decade, much faster and much more orderly and reliable." 

Shadow minister Ted O'Brien begged to differ on blackouts, saying:

"Labor’s policy settings are driving the premature closure of baseload power stations, with more than 20 gigawatts set to leave the grid by 2035, without any guarantee of a replacement.”
"Labor’s reckless and rushed energy policy will ensure Australians pay more for less reliable energy.”

FlowNews24 asked to speak with Minister Bowen but he was unavailable.

Peak employer group AiGroup chief executive Innes Willox said the AEMO report was another warning of the urgent need for electricity infrastructure in coming years:

"The AEMO electricity update released today is another warning as to the urgent need to get more electricity infrastructure in place over the next few years.
"Old coal capacity is leaving. Gas peakers continue to play a critical role, but there are questions over whether they will run short of gas to operate before they are switched to clean fuels. Replacement renewable generation, transmission and storage assets are facing a mix of delays from pandemic-snarled supply chains and slow approvals processes.
"Recent financial commitments and market reforms from governments are positive, but they need to be complemented by on-the-ground progress on getting big stuff built. Every new development has its impacts and critics, but we will all suffer the consequences if we can't replace old generators in time."

Climate Council senior researcher Carl Tidemann said the latest report showed wind and solar energy was making a difference to ensure reliable electricity supply.

"The way we use energy has already changed and we need an electricity system that meets our needs today as well as those well into the future."

Projects that could reduce the reliability gap include Transgrid's 360km HumeLink to connect Wagga Wagga, Bannaby and Maragle and increase the amount of renewable energy that can be sent across NSW.

The Hunter Transmission Project, Marinus Link, other transmission projects, battery developments in various states and Victoria's offshore wind plans may also reduce the forecast reliability risk, according to the report.

An ambitious South Australian hydrogen energy plan for Whyalla that premier Peter Malinauskas took to the state election is expected to be completed in 2025. Analysts have indicated it is ten times the capacity of any other hydrogen power plant in the world right now, proposing 250MWe of electrolysers and 200MW of power generation and associated hydrogen storage to absorb excess renewable energy.

Nationally proposed generation and storage projects would triple existing generation capacity, with large-scale solar, wind and batteries accounting for 86 per cent.


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