AEMO: reliability gaps and disruption still imminent

On 21 February 2023, the Australian Energy Market Operator (AEMO) released an update to its Electricity Statement of Opportunities (ESOO). The ESOO provides market data for the National Energy Market (NEM) over a 10-year period and is designed to inform planning and decision making across Australia’s electricity market. 

The update comes mere months after the ESOO’s original publication on 31 August 2022, (see our article on that here). AEMO says the update was necessary due to significant new market developments which considerably affect available generation capacity in the NEM and therefore the adequacy of supply across the different regions, including:

• a one-year delay on both Snowy 2.0 Hydro Project and gas-fired Kurri Kurri Power Station;
• the expected closure of AGL’s 800 MW gas-fired Torrens Island B Power Station brought forward by 8 years to 2026;
• a three-year extension to Origin’s 180 MW gas-fired Osborne Power Station, originally due to close late 2023;
• projects in SA (Bolivar Power Station) and NSW (Waratah Super Battery Project) now considered committed and scheduled for operation from 2023 and 2025 respectively; and
• commitments from various generation developers across the NEM totalling 461 MW of battery and 1,326 MW of wind (excl. projects which have not yet achieved committed status).

In short, Australia’s main electricity grid is no longer likely to experience major supply issues this summer. Subject, of course, to unforeseen weather events or other large generation and/or transmission outages across the NEM.

But gaps are still imminent and likely to emerge from 2025. All mainland states are expected to breach the reliability standards from as early as 2027 without significant additional investment. AEMO says “investment in firming generation, such as hydro, gas and long duration batteries [are] critical to complement our fleet of weather-dependent renewable generation” as Australia transitions away from coal.

Can Australia rise to the challenge and become a leader in the transition towards a more sustainable and renewable future? We’d like to think so, but stay tuned.

Questions? Give us a call.