AEMO warns of blackout risk in South Australia as generators shut

South Australia is at heightened risk of electricity blackouts, authorities warn, as they seek emergency summer supplies.

Blackout risks are intensifying in South Australia for the next three years, authorities warn, as they seek emergency reserves to ensure supply this summer.

Risks of power shortages will heighten with the mothballing of several gas-fired power stations, including Torrens Island and Osborne, the Australian Energy Market Operator’s forecast released on Thursday warns.

There was “a lot of work to do to keep the lights on”, the Australian Industry Group warned, saying the prospect of serious power shortfalls across SA, New South Wales and Victoria this decade could not be ignored.

Extra electricity reserves are being sought across those three states for summer as AEMO attempts to manage the potential supply shortfall.

The increased grid reliability risk will not be curbed by the scheduled opening in early 2026 of a 204MW government-owned hydrogen power plant at Whyalla, costing $593m.

Transmission lines at Torrens Island power station. Picture: Carla Gottgens/Bloomberg via Getty Images

Relief from the power shortage risk will not come until 2027-28, when the 800MW interconnector between SA and New South Wales will be at full capacity.

Industry warned there was “a lot of work to do to keep the lights on”, saying the warning of serious power shortfalls across SA, NSW and Victoria this decade could not be ignored.

The national electricity market forecast comes a day after Premier Peter Malinauskas branded the system “a real public policy disaster” and declared state leaders should not “shirk responsibility” for soaring prices crippling households and businesses.

Ai Group chief executive Innes Willox, who represents more than 60,000 businesses employing more than one million staff, warned the economy would grind to a halt if Australia failed to replace old coal plants before they fell over.

“The electricity reliability outlook may have improved since May but it is clearer we will not keep the lights on without sustained national effort to speed up the planning, approval and delivery of new energy infrastructure,” he said.

“ … AEMO are also very clear: unless many more planned projects are actually permitted and delivered, we will have serious power shortfalls across NSW, Victoria and South Australia this decade. This is a warning that cannot be ignored.”

Energy Minister Tom Koutsantonis said the electricity system security in SA was “well-placed”.

“I’m confident we have adequate supplies to meet our needs,” he said.

“ … AEMO are not fearful of blackouts this summer. They think South Australia has adequate supplies to meet under any standard reliability.

“Obviously we set very, very tight reliability standards and this is something that we do as a reserve backup to make sure there is generation available.”

But Opposition energy spokesman Stephen Patterson accused the Labor government of sacrificing “energy affordability and reliability with their rush to renewables”.

“AEMO will seek and procure extra electricity from generators in the market who could then pass this cost onto consumers through their power bills – another kick in the guts to struggling South Australians in the midst of Labor’s cost-of-living crisis,” he said.

“South Australian households and businesses are paying some of the highest power prices in the world for a grid that is becoming increasingly less reliable.

“The news that South Australia could be facing blackouts this year is yet another cruel blow for working families and businesses who are already struggling to keep the lights on.”

AEMO chief executive officer Daniel Westerman said the 10-year National Electricity Market outlook showed “it was critical” to ensure reliable supply of electricity to homes and businesses would require expected investments in new generation, storage and transmission to be delivered on time and in full.

“If delays occur to projects already underway or further investment does not materialise, then the outlook for reliability will deteriorate,” he said.

AEMO chief executive officer Daniel Westerman. Picture: NCA Newswire / Nicki Connolly

Mr Westerman said AEMO was undertaking extensive summer preparations with industry, as well as tendering for the extra reserves.

But he said reliability outlook had improved compared to last year’s AEMO 10-year forecast and the energy transition was well underway nationally, with renewable generation supplying 40 per cent of electricity into east coast homes and businesses.

“Investments in renewable generation and storage continue to increase, and the pipeline of new projects continues to expand, filling the gaps being left by the retirement of Australia’s ageing coal fired power stations,” Mr Westerman said.

“Compared to last year’s report, the reliability outlook has improved, assisted by the progress of 5.7GW of grid-scale generation and storage, and 365km of new transmission developments.

“This progress, along with delivery of transmission projects, a coal plant extension, and higher contribution from rooftop solar, has improved the reliability outlook.”

Originally published as AEMO warns of blackout risk in South Australia as generators shut