Power shortages on the east coast threaten without new projects: AEMO

“Earing may have an important capacity role to play,” analysts at investment bank Macquarie said last week.

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As the clean energy transition gathers momentum, the rollout of large scale wind and solar farms coupled with booming adoption of rooftop solar panels in Australia have radically transformed the market and displaced fossil fuels.

Renewable energy generation hit a record high in the last three months of 2022, supplying an average of 40 percent of grid electricity for the quarter, beating the previous record of 35 percent set in the same period last year.

With power generation being a dominant source of Australia’s emissions, reducing the output of coal-fired power plants will help significantly reduce the national carbon footprint and meet the federal government’s commitment to cut national greenhouse gas emissions by 42 per cent by 2030.

The Albanian government’s commitment includes a target for the grid to get 82 percent of its electricity from renewable sources this decade and is backed by a $20 billion “Rewiring the Nation” fund to modernize the grid and build new transmission lines to develop to enable the flow of energy across the country and increase reliability.

However, AEMO is increasingly concerned about the slow roll-out of a new ‘consolidating’ generation such as pumped storage power plants, gas and long-term batteries, which will be crucial to supporting renewable energy and avoiding blackouts when the sun is not windy.

“Investments in solidifying power generation … are critical to complementing our growing fleet of weather-dependent renewable power generation to meet coal-free power needs,” Westerman said.

Demands for new gas-fired power generation to shore up the electricity grid could increase the political challenge for Labour, which needs support from the Greens to pass its new policy to cut industrial emissions, known as the Safeguard Mechanism. The Greens have been pressuring Labor to commit to stopping new gas fields as a condition of their support.

Australia narrowly averted power outages last year as several coal-fired power plants suffered unexpected outages and other supplies were withdrawn, while gas-fired generators faced rising fuel prices in the aftermath of the war in Ukraine.

Tony Wood, director of energy at the Grattan Institute, a prominent policy think tank, said significant gaps may be emerging in the market, but noted that there is also a big disconnect between new projects that “potentially” come online and projects that far away – advanced enough to be considered as committed by AEMO.

Of the 209 gigawatts of new projects, only 10 gigawatts are considered committed.

“The part that makes it difficult is whether these projects are ‘possible’ but not ‘likely,’ and how likely are these things to move forward?” Holz said.

“Calling it a wake-up call is probably strong, but there are some big gaps emerging here… and there are a lot of possibilities.”

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