What you need to know about the once-in-a-century plan to transform the Australian energy market

June 30, 2022 Add Comment

The future of Australia’s energy transformation has been charted by the Australian Energy Market Operator (AEMO) as it grapples with challenges over electricity security and consumer costs.
describes how the country can convert fossil fuels into renewable energy – ending Australia’s reliance on coal through approximately $320 billion in investment in what has been described as a “once in a century” transformation.

The market operator has called for an immediate start on upgrading the grid’s transition to renewables and the transition from fossil fuels by 2050.

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It has projected that the network serving the eastern states – including South Australia – will require 10,000km of new transmission lines to help connect a nine-fold expansion of wind and solar power by 2050 to ensure this is completed as soon as possible. can happen.
To support this growth, the network will also need to triple the amount of reinforcement capacity (guaranteed energy available) through pumped hydro, batteries and gas plants as coal generation exits the market.
David Leitch, energy policy expert at ITK Consulting, said the plan outlines the best way to decarbonise the electricity generation system in the future.
“Doing this right requires a lot of investment and a lot of support from federal to state governments,” he told australiabusinessblog News.
“It is by putting everyone on the same path that we will do this smoothly with the least amount of disruption.”

What does the plan say?

Solar panels in a rural environment

Solar panels at solar farm on the northern edge of Canberra. Source: MONKEY † MICK TSIKAS

Electricity costs

this winter as cold temperatures combined with global energy market shocks as a result of the war in Ukraine.
AEMO CEO, Daniel Westerman, said the regulator’s report is based on two years of collaboration with industry, stakeholders and government.
“It outlines the investment needed to provide reliable, safe and affordable energy to Australian homes and businesses,” he told reporters on Thursday.
“Australia is experiencing a once-in-a-century transformation in our energy systems.”
But the AEMO’s findings point to the due to the disruption of supply chains.
It argues that this has only strengthened the case for a shift to renewables and promoted ensuring energy sustainability as a “matter of great national urgency”.
The report notes, “the potential for solid renewables to protect consumers from global raw material shocks.”
AEMO’s report says that if this transformation is successful, it will provide low-cost renewable electricity with “reliability and safety”.
It adds that this will also help meet the climate targets and contribute to regional jobs and economic growth.
Mr Leitch said AEMO’s plan would ensure electricity prices “stay roughly where they are” and consumers are unlikely to experience higher prices in the medium or long term.
“There will be more transmission costs, but lower fuel costs, because we won’t have to pay for coal and gas once you’ve decarbonised the system completely,” he said.
According to government data, coal currently supplies up to 54 percent of Australia’s electricity.
But the AEMO predicts that nearly two-thirds of this power capacity will be off by 2030.
AEMO’s plan also envisions that more Australians will help support the energy transition by reducing their own dependence on the grid.

The market participant estimates that more than two-thirds of individual homes and businesses will install solar panels, up from about 30 percent today.

Reliability

the AEMO says investments are needed to avoid future volatility.
According to the AEMO, five major energy projects in NSW, Victoria and Tasmania need to be built “as urgently as possible”.
Together they will cost $12.8 billion, but they are considered fundamental to supporting future electricity generation and storage.
AEMO also predicts that the grid’s annual electricity consumption will double by 2050 as more transportation, heating, cooking and industrial processes are electrified.

The regulator says this question is why investments are needed to triple the strengthening capacity of new low-emission alternatives.

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Gas-fired generation will remain necessary until 2050, which may require the replacement of older and less efficient peak installations (installations that operate during peak hours).
Professor Ken Baldwin of the Australian National University said he believed the transition to renewable energy proposed by the AEMO was realistic, given the already high rate of deployment of solar and wind energy per capita (or per person). in Australia.
“The Australian energy transition is moving at a very fast pace. In fact, we are moving at the fastest pace of any country in the world,” he told australiabusinessblog News.

“This means that over the next ten years we will see a rapid exit of coal-fired power plants in particular and their replacement with wind and solar energy.”

Climate goals

Australia has committed to a net zero emissions target by 2050.
The new Albanian government has also adopted a 43 percent emissions target by 2030 based on 2005 levels – more ambitious than its predecessors.
The report also says that nearly all industrial sectors have expressed their intention to reach net zero emissions by 2050, giving confidence in the viability of electrical alternatives.

In a statement, Energy Secretary Chris Bowen said the AEMO report had confirmed that the national energy market “needs urgent investment in transmission and scheduling to ensure reliability and affordability through this change.”

Energy Secretary Chris Bowen speaks at the National Press Club.

Chris Bowen, Secretary of Climate Change and Energy, says the energy market needs urgent investment. Source: MONKEY † BIANCA DE MARCHI/MONKEY IMAGE

He pointed to his government’s planned $20 billion spending under the Rewiring the Nation plan to modernize the grid as an investment “designed to provide the necessary low-cost financing for the urgent upgrade and build-out of the grid.”

Professor Baldwin said that despite the “dazzling” large amounts of private and public investment needed to secure the energy transition, projections showed pursuing the option would still be cheaper than investing in more fossil fuels.
“Australia’s integrated systems plan aims to achieve net zero emissions by 2050,” said Professor Baldwin.

“This will be done by basically electrifying the entire economy and turning off electricity generation itself” [mainly] fossil fuels to predominantly renewable energy.”

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