AEMO chief Daniel Westerman targets 100 per cent renewables in world first

Australia will aim to run the electricity grid entirely from solar and wind generation by 2025 under a 100 per cent renewable target set by the power system operator.

The new CEO of the Australian Energy Market Operator, Daniel Westerman, in Melbourne on Tuesday. Picture: NCA NewsWire/Nicki Connolly

Australia will target running the electricity grid entirely from solar and wind generation by 2025 under a 100 per cent renewable target laid out by the power system operator, which has also backed Snowy Hydro’s controversial NSW gas plant, saying the fossil fuel has a vital place in the energy mix.

The ambitious goal – putting the nation on track to lead the world transitioning to clean energy – has been set by the new boss of the Australian Energy Market Operator, who said it would mark “uncharted territory” for the country as it works out how to integrate more renewables into the power system as old coal plants face retirement.

South Australia broke new ground in October with solar providing 100 per cent of its energy needs for an hour. AEMO said the feat could be emulated across the entire electricity system at peak points during the day, despite it being a huge jump from solar and wind penetration levels of 52 per cent in 2020.

“Across the whole east coast National Electricity Market, there are already points in time when renewable energy contributes to more than half of all electricity supply. That puts us at the front of the pack for renewables penetration for any large grid in the world,” AEMO’s new chief executive Daniel Westerman will tell a CEDA forum in Melbourne on Wednesday. “But the pace of change in Australia continues to accelerate. So the goal that I’m setting for us, Australia’s independent system operator, is to harness the talents, capabilities, experience and know-how across the industry, to engineer grids that are capable of running at 100 per cent instantaneous penetration of renewable energy. And do this by 2025.

“So that’s a grid able to manage 100 per cent renewables penetration – at any moment in any day – by 2025.”

Renewables accounted for nearly a quarter of system supplies in 2020, up from 21 per cent in 2019, with coal and gas generating 73 per cent of grid needs. But AEMO says a system needs to be built that can handle instant renewable penetration of up to 100 per cent when solar and wind are running at capacity.

Setting the goal was not connected to ideology but rather reflected large quantities of renewable generation already online and further supply to be delivered.

“The bold renewables target had nothing to do with ideology, instead reflecting the mass of new renewables supply both in the system and projected to come online in the next few years. This is uncharted territory for a large, independent grid anywhere in the world. And this must be our goal not because of personal ambition, politics or ideology, but because we know this is where we’re headed,” Mr Westerman will say.

 

Underlining the trend, a giant $100bn renewable energy hub was proposed in Western Australia on Tuesday, with the facility in line to be one of the world’s biggest clean fuels projects.

The AEMO chief will also throw his support behind the government-owned Snowy Hydro and its controversial decision to build the Kurri Kurri gas plant in the state’s Hunter Valley,

Kurri Kurri may only run for 2 per cent of the time, using both gas and diesel, according to Snowy, but the power system operator said there was a place for it in the grid to back up other forms of generation.

“In Australia, gas seems to have become the most debated piece of the energy jigsaw. I don’t think it needs to be,” Mr Westerman will say.

“The prospect that the recently announced gas-fired power station at Kurri Kurri might only be needed for 2 per cent of the time seemed to draw quite a lot of attention. But the conclusion to make is not that firming plants like these aren’t required. The point is even at 2 per cent of the time, dispatchable generation like this unlocks many multiples of low-cost renewable generation capacity into the market by providing the security for when the sun isn’t shining, the wind isn’t blowing and other storage can’t bridge the gap.”

Mr Westerman, a Melbourne-raised executive who was working for Britain’s National Grid, took on the top job in May following the departure of high-profile boss Audrey Zibelman, who quit to join X, the “moonshot” factory at Google’s parent company Alphabet.

AEMO has previously said nearly 90 per cent of power demand could be met by renewable generation during periods through the day by 2035, requiring up to 50GW of large-scale solar and wind to be added, requiring nearly all the current capacity of the market to be built in just two decades.

Still, integrating massive amounts of renewables faces several hurdles. An ­Energy Security Board report said a failure to deal with the entry of intermittent supply could cost the nation in the long term, with the market operator forced to intervene at record rates so far this year. “With our existing tool kit, it’s getting harder for us to manage the stability of the power system as the penetration of solar and wind, even at today’s levels, pushes the system to its limits,” Mr Westerman will say.

Coal, which currently provides as much as 70 per cent of electricity, will contribute less than a third of supply by 2040 and could be forced out much earlier as competition from renewables and carbon concerns make plants uneconomic, AEMO forecasts show.

Originally published as AEMO chief Daniel Westerman targets 100 per cent renewables in world first