In its latest update, The Australian Energy Market Operator wants everyone to know the outlook has improved and things will be just fine. Except, that is, for anyone living in Victoria, NSW or South Australia, which could run short of power this summer. And only if everything goes to plan, with promised projects delivered on time and in full, and putting to one side the question of cost.
Key passages from the 177-page AEMO document include: “Over the near term, on-time and in-full delivery of committed, anticipated and federal and state government supported generation projects, as well as anticipated and actionable transmission developments and the co-ordination of embedded consumer resources, is critical for reliability.”
It says: “If only those projects already committed or anticipated proceed, and if risks of commissioning delays eventuate as they have in recent years, reliability gaps are forecast in Victoria, NSW and South Australia.”
AEMO says that during the transition to new forms of energy supply it is critical for existing ageing coal generators to maintain high levels of availability and reliability prior to closure.
It notes that project development delays and broader international and domestic supply chain challenges are emerging as material risks to the delivery of transmission, generation and storage projects.
“Delays to the delivery of any of the identified projects, relative to the dates envisioned by the schemes and proponents, have the potential to result in periods of high risk throughout the 10-year horizon,” the document says.
This is all cold comfort given the woeful track record of government delivery of major projects in general and energy in particular.
The list of state and federal programs that must be delivered includes the Federal Capacity Investment Scheme, the NSW Electricity Infrastructure Roadmap and its firming tenders, the Victorian Renewable Energy Target Auction 2, the Queensland Energy and Jobs Plan and the South Australian Hydrogen Jobs Plan.
On top of this will be the need for investment in a range of technologies to replace network services currently provided by baseload coal. This is to ensure that the electricity network remains both stable and resilient under normal operating conditions, and following disturbances.
AEMO says that over the coming decade, the rapid energy transition will result in a significant need for new assets and providers of these essential system services, including for system strength, frequency management, voltage control, ramping capability, and system restart services. It is still a complex and ill-defined journey laden with risk. What could possibly go wrong.
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Australia’s energy transition is spluttering to an uncertain future.