Tuesday 21 May
The Australian Energy Market Operator has released an update to the 2023 National Energy Market Electricity Statement of Opportunities. This updated forecast for the energy market warns of potential energy gaps in New South Wales, Victoria and South Australia unless there’s swift investment and build of renewable energy projects, and transmission lines to connect them.
However, energy experts below have noted that the AEMO modelling makes conservative assumptions and that extending the life of the Eraring coal-fired power station in NSW could in fact lead to more blackouts.
To arrange interviews with Stephanie Bashir or Johanne Bowyer, please contact:
Jacqui Street, Climate Media Centre, 0498 188 528 / jacqui.street@climatemediacentre.org.au
Dylan Quinnell 0450 668 350 / dylan.quinnell@climatemediacentre.org.au
To arrange interviews with Tim Buckley from 2pm AEST Tuesday 21 May 2024 please contact: Annemarie on 0428 278 880 or Tim direct on 0408 102 127.
ANALYSTS AVAILABLE FOR INTERVIEWS:
Stephanie Bashir, Principal of Nexa Advisory
Stephanie is an energy expert with more than 20 years’ experience. She previously led the policy vision and strategy at AGL Energy as Senior Director of Public Policy.
Stephanie Bashir is at a Conference in Sydney and is available before 0900 or after 1pm AEST today for interviews.
Stephanie Bashir said: “In August 2023 AEMO assessed in its annual Electricity Statement of Opportinities that there was a minimal looming power reliability gap with the current timetable of coal-fired generation shutdowns and that it was manageable. This was then confirmed in the release of the NSW Energy Security Monitor Report in December 2023. So what’s really changed?
“Months later in a unique updated ESOO, AEMO is saying the lack of progress on transmission and renewable energy projects means there will be 1 gigawatt of gap between 2025 and 2028. Transmission delays for actionable projects have been known for six years over multiple versions of the Integrated System Plan that AEMO also publishes.
“If the situation has really changed for technical, not political, reasons in just four months then taxpayers and consumers must have transparency before they pay the $120-150 million a year to keep Eraring open, plus higher electricity bills.
“It is time for AEMO and the NSW government to step up and act with urgency. AEMO manages the connections and commissioning of projects and the NSW government manages the project approvals. These are identified as the biggest roadblocks to getting projects to shovel-ready stage. We are yet to hear a commitment from NSW Planning Minister Paul Scully on the plan to prioritise the outstanding renewable energy projects in the pipeline.
“The lobbyists for the big end of town say consumers must hand over $120-150 million a year to Origin Energy to keep Eraring open. Surely there is a better use of taxpayer dollars in this cost of living crisis? Origin is a publicly listed company that should be propped up by shareholders – not taxpayers.
"The ESOO does not say there will be blackouts. In fact the gap identified each year in the sensitivity analysis under worst case scenario is still fairly small and can be filled with big batteries similar to the Waratah Super Battery and demand side flexibility.”
Tim Buckley, senior energy market analyst, director of Climate Energy Finance
Climate Energy Finance (CEF) is a non-partisan think tank established in 2022 that works pro bono in the public interest on accelerating decarbonisation in line with climate science.
Location: Sydney. NOTE - Tim is available for interview from 2pm AEST Tuesday 21 May 2024, via Annemarie on 0428 278 880 or Tim direct on 0408 102 127.
Tim Buckley said: “For NSW, the new May AEMO electricity reliability statement is exceptionally disappointing.
“The real reliability gap here is the failure of authorities to accelerate the rollout of renewable energy, transmission and grid connections needed to ensure cheap and reliable energy to consumers statewide.
“AEMO models in its May report released today that NSW reliability has improved relative to 2023, but only if new investments underway in renewable energy, dispatchable capacity, transmission and Consumer Energy Resources (CER) such as rooftop solar and batteries progress as advised. AEMO is not confident of this, and yet it is AEMO itself that is in charge of facilitating connection of these developments to the grid post construction.
“It is beyond time AEMO responded with a level of urgency consistent with tackling the energy, cost of living and climate crises smashing NSW energy households and businesses. These concurrent crises will only be solved by an accelerated transition to firmed renewables and a decarbonised, connected grid.
“We also find in the AEMO report that Transgrid has notified it is another year behind schedule for the commissioning of the full 800MW of Project EnergyConnect – the new electricity transmission line under construction that will connect South Australia and NSW – now delayed to July 2027.
“This development is also key to the transition of the NSW electricity system away from coal-fired power.
“CEF trusts Transgrid’s executives’ bonus scheme is zeroed on the back of this pathetic effort, as the NSW government now reportedly contemplates extending the operation of end-of- life, unreliable mega coal clunker Eraring power station beyond its planned closure date of 2025.
“Our research shows this would involve another $150m annual coal subsidy to Origin Energy, costing each NSW residence some $150 p.a. to both fund the subsidy and wear the cost of higher wholesale power prices as new firmed renewable electricity capacity is crowded out and undermined by the policy back-flip – also a massive disincentive to renewable energy investors.”
Johanna Bowyer, Lead Analyst, Australian Electricity, Institute for Energy Economics and Financial Analysis (IEEFA)
Johanna Bowyer is based in Sydney and is available after 12pm today for interviews.
Johanna Bowyer said: “The AEMO ESOO shows that if transmission, generation and storage build out proceeds per the timelines considered typical by AEMO, alongside committed investments in coordinated consumer energy resources, NSW and Victoria are forecast to breach the reliability standard over most of the outlook period.
“If a larger number of energy projects are included in the outlook, and these projects are assumed to be installed on time as per the developer-advised schedule, while coordinated consumer energy resource uptake grows more strongly, the reliability standard is maintained except for in NSW in 2025-26 and some of the later years in Victoria.
“It will be key for governments and the energy industry to install new energy projects at pace and ensure strong uptake of consumer energy resources to maintain reliability.
“For Eraring to exit on time while staying within the reliability standard, all the energy projects in AEMO’s ‘federal and state schemes’ modelling would need to be built on schedule, while coordinated consumer energy resource uptake grows, and additionally, the 2025-26 reliability risk in NSW would need to be addressed by quickly bringing in additional energy supply, storage or demand-side projects.
“Our own IEEFA modelling demonstrated that if Eraring stays online for longer, other coal-fired power stations in NSW would be impacted financially, as they would sell less power into the market. So subsidising Eraring to stay open for longer could have the unintended consequence of making other coal-fired power plants financially vulnerable.
“We note that a significant amount of the ESOO report is based on the more stringent Interim Reliability Measure (IRM), which is a measure used to support a few specific electricity market processes and was extended last year. This means some reliability risks might appear larger compared to the prior ESOO. The extension of the Interim Reliability Measure was opposed by most stakeholders. There is evidence suggesting consumers are not willing to pay for an IRM level of reliability.”
ENDS
Contact details:
To arrange interviews with Stephanie Bashir or Johanne Bowyer, please contact: Jacqui Street, Climate Media Centre, 0498 188 528 / jacqui.street@climatemediacentre.org.au
Dylan Quinnell 0450 668 350 / dylan.quinnell@climatemediacentre.org.au
To arrange interviews with Tim Buckley from 2pm AEST Tuesday 21 May 2024 please contact: Annemarie on 0428 278 880 or Tim direct on 0408 102 127.