AEMO warns of ‘reliability risks’ across mainland Australia as energy transition stumbles

The Australian Energy Market Operator is warning of “reliability gaps” without the ‘timely’ delivery of more transmission and energy infrastructure.

Millions of Australians face the risk of electricity blackouts without the “urgent” delivery of greater energy and transmission infrastructure, the Australian Energy Market Operator has warned.

The warning comes as delays pile up in green energy projects and traditional power sources go offline.

In its latest 10-year forecast for the National Electricity Market, AEMO says a delay in the EnergyConnect transmission line cable linking power grids in South Australia and NSW and mothballed gas and diesel generators in South Australia had increased “reliability risks” for NSW and Victorian households from 2024 to 2027-28 and South Australian households in 2026-27.

“Industry and governments are responding to the reliability risks from retiring coal by investing in new infrastructure to ensure a reliable and secure electricity supply going forward,” AEMO CEO Daniel Westerman said.

“The urgency for the timely delivery of transmission, generation and storage, and use of consumer electricity resources to support the grid, remains to meet consumers’ energy needs.

“While new generation and storage capacity continues to increase, project development and commissioning delays are impacting reliability throughout the horizon.”

Project EnergyConnect is a $2.3bn transmission interconnector linking power grids in South Australia and NSW. Picture: Supplied

EnergyConnect, a $2.3bn transmission line running from Robertstown in South Australia to Wagga Wagga in NSW, is expected to feed more renewable energy into the NEM and AEMO has deemed the interconnector a “required project” to fortify the eastern energy market.

But the project has been hit by rolling industrial action, with Electrical Trades Union workers infuriated by alleged safety breaches on the project’s work sites and locked in a heated months-longs dispute over a new enterprise agreement with electricity operator TransGrid.

The project was scheduled to come online in 2026, but the commissioning date has been pushed out to July 2027.

To manage risk, AEMO said it would tender for “interim reliability reserves” to minimise the consumer impact of reliability risks.

To improve the overall outlook, the regulator calls for “firming and renewable energy developments that have specific funding, development or contracting arrangements under federal, state and territory government schemes and programs”.

The warning comes as the NSW government considers keeping Origin Energy’s Eraring coal-fired power station open beyond its scheduled 2025 closure date to maintain reliability in the network.

Origin Energy's Eraring power station. Picture: Supplied

Johanna Bowyer, lead analyst for the Institute of Energy Economics and Financial Analysis, said risk would be reduced maintained if typical construction timelines were maintained.

“It will be key for governments and the energy industry to install new energy projects at pace and ensure strong uptake of consumer energy resources to maintain reliability,” she said.

Prime Minister Anthony Albanese, speaking to the report on Tuesday morning, said his government’s focus on green energy was the right path for the country and slammed the push for nuclear power from Opposition Leader Peter Dutton.

“What the energy market operator has not called for – that is for a transition to nuclear reactors. That’s the alternative,” he said.

“Peter Dutton’s plan is to once again press pause on action on the transition to a clean energy economy, while he has this so-called plan on nuclear reactors.

“He won’t tell you where they’re going to be, he won’t indicate who’s going to finance them and he won’t tell you what the cost will be.

“What we know is that it is up to six times more costly than renewable energy. That’s not a plan, that’s a disaster.”

Originally published as AEMO warns of ‘reliability risks’ across mainland Australia as energy transition stumbles