In the midst of unprecedented upheaval in the National Electricity Market (NEM), the Australian Energy Market Operator (AEMO) has released a 30-year plan to enable renewable energy to replace the existing coal generation.
Chief Executive of AEMO, Daniel Westerman said the 2022 Integrated System Plan (ISP) was based on rigorous economic and engineering analysis, and outlined a roadmap of investments for the NEM.
Mr Westerman said the need to cost-effectively deliver the investment in firmed renewables had gathered momentum in recent months.
“We’ve recently seen market dynamics exhibiting the step change scenario, including accelerated coal-fired power station closures,” Mr Westerman said.
“In addition, generation unavailability and high commodity prices further highlight the need to invest in the transmission plan outlined in the ISP to support firmed renewables,” he said.
“The ISP will help industry participants, investors, Governments and communities plan for the decarbonisation of the power system to deliver low-cost, firmed renewable electricity with reliability and security.”
Mr Westerman said the ISP would also help meet State and national climate targets.
The CEO said Australia was experiencing a complex, rapid and irreversible energy transformation.
“The 2022 ISP informs Australia’s energy transformation, based on an ‘optimal development path’ of essential transmission investments that will efficiently enable low-cost, firmed renewable energy to replace exiting coal generation,” he said.
“These transmission projects are forecast to deliver $28 billion in net market benefits, returning 2.2 times their cost of $12.7 billion, which represents just seven per cent of the total generation, storage and network investment in the NEM.”
Mr Westerman said that as part of developing the ISP, AEMO and stakeholders identified the most likely future for the NEM, called the ‘step change’ scenario.
“The step change scenario forecasts annual electricity consumption from the grid will double by 2050, as transport, heating, cooking and industrial processes are electrified and 60 per cent of current coal generation exiting by 2030,” he said.
“To maintain a secure, reliable and affordable electricity supply for consumers through this transition to 2050, investment is required for a nine-fold increase in grid-scale wind and solar capacity, triple the firming capacity (dispatchable storage, hydro and gas-fired generation) and a near five-fold increase in distributed solar.”
AEMO’s 103-page System Plan can be accessed at this PS News link.
