Distributed and large-scale renewables improve reliability outlook for Australia’s main grid

The reliability of Australia’s power supply has improved driven by the addition of new solar and wind capacity, making summer blackouts less likely, the Australian Energy Market Operator finds in its latest report. In light of the aging coal fleet and scheduled plant closures, timely commissioning of new generation, storage and transmission investment will be critical.

The rapid development of large-scale solar and wind projects and the unstoppable growth of Australia’s rooftop PV fleet have boosted the reliability of power supply across the nation’s main grid covering the eastern and southeastern states, reducing the risk of summer blackouts to the lowest level seen in recent years. However, more action is required to fill in the gap left by retiring coal-fired generators.

In its annual Electricity Statement of Opportunities (ESOO) forecast released this week, the Australian Energy Market Operator (AEMO) finds that unserved energy is not expected to exceed the reliability standard in any region of the National Electricity Market (NEM). Thanks to the inflow of new renewable energy generation for the coming summer, the new forecast is in stark contrast to the last year’s ESOO, which ominously predicted a summer punctuated by a high risk of “simultaneous unplanned outages[2]” as a result of decreasing reliability of ageing coal-fired generators.

“It is great to see how industry’s investment in new resources improves the reliability outlook for this summer,” AEMO Managing Director and Chief Executive Officer Audrey Zibelman said, noting an additional 4,300 MW of new renewable energy capacity will be operational this summer compared to what was available last summer.

Last year, the increasingly frequent coal outages combined with extreme weather events and devastating bushfires to leave some parts of the grid exposed to supply shortages. That is why emergency power supplies are still being sought this year, including obtaining short-notice Reliability and Emergency Reserve Trader (RERT). Looking further ahead, the ageing fossil fuel generators still pose a major risk.

“In future years, the declining reliability of the aging coal fleet and scheduled plant closures contribute to projected increases in unserved energy, particularly in New South Wales (NSW), and to some degree in Victoria,” Zibelman said. “Timely investment in transmission projects identified in AEMO’s latest Integrated System Plan[3] (ISP), and projects such as those announced under the NSW Emerging Energy Program[4], will help address this risk.”

The situation is particularly dire in NSW, where the need is great for timely commissioning of new generation, storage and transmission investment in development, including the Queensland to NSW Interconnector (QNI)[5], given the scheduled close of the coal-fired Liddell Power Station in 2023 and declining plant reliability.

Demand goes down

Across the NEM, the unfolding Covid-19 pandemic is expected to reduce peak demand and energy consumption over the coming summer in most scenarios. On top of that, as a result of continued strong uptake of rooftop PV, the ESOO forecasts rapid declines in daytime minimum operational demand. In South Australia (SA), it points to the importance of Project EnergyConnect[6] in helping alleviate system security risks under certain conditions when minimum operational demand is low.

The tremendous growth of rooftop PV, particularly in SA, has laid bare that the Australian grid has been seriously lagging behind in the integration of distributed energy resources. As part of SA’s plan to stabilize its grid as it moves towards its 100% renewables goal by 2030, the state government has given the green light to AEMO to switch off its rooftop PV fleet in times of emergency[7] and thus address any major drops in operational demand that could compromise grid stability and cause blackouts.

“As we continue to see the increasing shift towards non-traditional generators and the increasing take up of household rooftop PV, we are encountering new challenges of managing voltage, system strength, and inertia,” Zibelman said. “With minimum demand carved out during the day, there’s an opportunity for innovative solutions and technologies to enter the market and utility-scale energy storage is likely to become increasingly important for daily operation.”

In a statement, Minister for Energy and Emissions Reduction Angus Taylor acknowledged the improved reliability outlook is due to lower forecast peak demand, minor generation and transmission augmentations, and significant development of large-scale renewable resources. He highlighted the need for projects such as the Snowy 2.0 pumped hydro and QNI to proceed. “We want to avoid a repeat of Victoria’s pitfalls after the closure of the Hazelwood power plant,” he said.


  1. ^ Posts by Marija Maisch (www.pv-magazine-australia.com)
  2. ^ summer punctuated by a high risk of “simultaneous unplanned outages (www.pv-magazine-australia.com)
  3. ^ AEMO’s latest Integrated System Plan (www.pv-magazine-australia.com)
  4. ^ NSW Emerging Energy Program (www.pv-magazine-australia.com)
  5. ^ Queensland to NSW Interconnector (QNI) (www.pv-magazine-australia.com)
  6. ^ Project EnergyConnect (www.pv-magazine-australia.com)
  7. ^ to switch off its rooftop PV fleet in times of emergency (www.pv-magazine-australia.com)

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