The Australian Energy Market Operator (AEMO) has released a 2020 Electricity Statement of Opportunities (ESOO) Update, which models the Yallourn Power Station’s confirmed exit and additional ‘committed’ generation and storage projects not considered in the 2020 ESOO.
This ESOO Update focuses on implications for the supply demand balance over the two-year period 2028-29 to 2029-30 for Victoria and South Australia, as these are the only two regions materially impacted by the confirmed closure of Yallourn Power Station.
AEMO Chief System Design Officer, Dr Alex Wonhas, said that generation changes subsequent to the 2020 ESOO mirror the dynamic nature of Australia’s transforming energy sector.
“Our ageing coal-fired power stations are rapidly nearing the end of their technical and economic life, while investment in renewable, battery storage and residential solar continues to increase at an unprecedented rate,” Dr Wonhas said.
“Certainty around Yallourn’s exit is welcome as it gives the market ample opportunity to prepare for a smooth transition without loss of reliability or excessive price impacts on consumers.
“The modelling of the Yallourn exit and new connections since the 2020 ESOO result in an increase in forecast unserved energy (USE) for Victoria and South Australia. As a result, the Interim Reliability Measure (IRM) will be exceeded in both states in 2028-29 and 2029-30, unless there is further commitment of dispatchable capacity,” he said.
With the right market settings, more dispatchable capacity is expected to be built and address these reliability concerns. Pleasingly, additional projects have already been announced. Whilst they are not yet qualifying under AEMO’s commitment criteria, they are very likely to proceed and will materially improve the forecast reliability outlook.
These include the 350 megawatt (MW) battery EnergyAustralia announced it would complete in 2026 and the 300 MW Tallawarra B peaking power plant the company has announced in the Illawarra in New South Wales.
Investment in new generation continues at significant speed. Last year alone, more than 40 projects totaling nearly 4,900 MWs completed registration or began exporting to the grid. A further 300 generation and storage projects totaling 55,000 MWs are proposed across the National Electricity Market (NEM).
“These new generation sources will help transition our electricity market as two out of three of today’s coal-fired generators are due to retire by 2040,” he said.
AEMO will issue the 2021 Electricity Statement of Opportunities report in August 2021.
ENDS
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Notes to the editor
Expected unserved energy (USE) is compared against both the Interim Reliability Measure (IRM) which aims to keep involuntary load shedding (loss of customer supply) to below 0.0006% of energy demand in a region in any given year, and the reliability standard with targets a maximum of 0.002% USE.
About AEMO
AEMO is responsible for operating Australia’s largest gas and electricity markets and power systems, including the National Electricity Market and interconnected power system in Australia’s eastern and south-eastern seaboard, and the Wholesale Electricity Market and power system in Western Australia.
AEMO also operates the Victorian Declared Wholesale Gas Market and the Victorian gas transmission system; the wholesale gas Short Term Trading Market hubs in Adelaide, Sydney and Brisbane; the Wallumbilla Gas Supply Hub in Queensland; and the Moomba Gas Supply Hub in South Australia.
As Australia’s independent energy markets and power systems operator, AEMO provides critical planning, forecasting and power systems security advice and services to deliver energy security for all Australians. For more information, head to www.aemo.com.au