Aussies warned of ‘real, growing risk’ of power generation falling short with 90 per cent of coal-powered plants to close within a decade
Australia’s energy transition is urgent and faces significant risks unless bureaucratic obstacles, public uncertainty and supply chain problems are addressed, officials warn.
Urgent investment is needed to support new sources of affordable electricity in the coming decade, when 90 percent of coal-fired generation ceases.
The latest modeling released by the Australian Energy Market Operator (AEMO) on Friday shows coal-fired power stations are closing earlier than planned and people are electrifying their homes at a faster pace.
According to system planning, modernized power systems will be able to sometimes run entirely on renewable energy sources.
But businesses and industry are expected to need more energy, not less, as they double their grid demand in a growing, decarbonized economy.
Under AEMO’s most likely “phase change” scenario, the annual capital cost of all electricity generation, storage, supply and transmission infrastructure has a present value of $121 billion.
But modeling suggests it will save consumers an additional $17 billion in costs over time.
Modeling shows coal plants are closing earlier than planned, but homes are being electrified faster
The Integrated System Plan (ISP) is prepared every two years, and the latest project, which will be completed next year, reflects a change in the federal government and many announcements about rebuilding the country and supporting new energy assets.
But there are concerns Australia is falling behind on needed investment, hampered by bureaucratic red tape, public uncertainty and fierce competition for equipment and labor amid a global push to replace fossil fuel networks.
Demand for energy sector workers is projected to grow from 40,000 in 2023 to a peak of over 70,000 by 2050. This workforce is needed in all disciplines, not just engineering.
The possibility that replacement generation will not be available when coal-fired power plants retire is “real and growing and is a risk that should be avoided,” the AEMO report said.
Electricity remains Australia’s largest source of greenhouse gases, so moving away from a coal-fired grid to a system dominated by renewable sources will do the heavy lifting to meet national emissions reduction targets.
Officials found that the sooner renewables and energy storage are online, the more secure the energy transition will be.
AEMO reaffirmed that the “cheapest” combination is transmission-connected renewable energy, backed by batteries and hydro, and backed by the rapid start-up of gas generation.
Daniel Westerman says the plan highlights the urgent need to provide safe, reliable and affordable energy. (Dean Lewins/AAP PHOTO)
Chief executive Daniel Westerman said the draft 2024 plan highlights the “urgency of investment” to ensure Australians have access to safe, reliable and affordable energy.
“Winning the trust of regional and rural communities is essential to avoid the risk that essential infrastructure will not be built before coal-fired generators close,” he said.
“While progress has been made, the transition is urgent and carries significant risks unless market and political conditions, social licenses and supply chain issues are addressed.”
He said the plan shows the need for 5,000 km of transmission lines, triple renewable generation and dual dispatchable storage, plus hydro and gas generation – over the next decade.
By 2050, almost 10,000 km of new and upgraded transmissions will be needed, a quarter of which will be built and half of which will be built in the next decade.
Grid-scale variable renewable generation needs to triple by 2030 (57 gigawatts) and increase sevenfold by 2050 (126 GW).
By 2050, almost four times more dispatchable storage, hydro and gas generation capacity (74 GW) needs to be added.
Rooftop solar panels, batteries and electric vehicles also play a role in energy security and two-way energy flow.
The quadrupling of rooftop solar capacity by 2050 (72 GW) will require smart meters and other technologies to maximize returns and control for consumers and market operators.
Public proposals for the 2024 ISP are due by February 16, and the plan will be finalized by June 2024.