Near Term Reliability Secure But Storm Clouds Are Gathering - AEMO 2020 ESOO

Near Term Reliability Secure But Storm Clouds Are Gathering – AEMO 2020 ESOO

Emily Wood | August 27, 2020

The release today of the annual Electricity Statement Of Opportunities (ESOO) by the Australian Energy Market Operator (AEMO) confirms that reliability of the energy system will meet required standards for the 2020/2021 summer and beyond.  However, it also highlights the many challenges presented by an ageing fleet of coal fired power stations and rapid uptake of variable renewable energy sources that needs to be carefully managed.

“While AEMO have provided some comfort that system reliability will meet all required standards, it is clear that storm clouds are gathering,” said EUAA CEO, Mr Andrew Richards.

“The situation is becoming increasingly complex.  Many of our ageing coal fired power stations are reportedly becoming less reliable, and, while there are many benefits to variable renewable energy sources, like wind and solar, they present unique challenges that need to be addressed as we move towards a low emissions energy sector.”

The ESOO highlights that due to the continued strong uptake of distributed solar, forecast minimum operational demand is declining rapidly.  By 2025, all regions are expected to experience minimum operational demand in the daytime and in South Australia and Victoria we could see negative demand towards by the end of the next decade.

“Low or negative demand creates an unstable energy system, impacting reliability and system strength.  In attempting to manage such a volatile environment, where increasing amounts of variable renewable energy is pushed into the system, AEMO must feel like they are pitching a tent in a hurricane.”

“It is the responsibility of governments to carefully consider the unintended consequences of policies that drive variable sources of energy generation into a system already showing signs of stress.  We need governments to help quell the coming storm, not add to its ferocity.”

The EUAA support the deployment of zero emissions technologies but remain realistic about the growing challenges this presents.  We call on governments, regulatory bodies and the energy industry to work collaboratively on the energy transition including appropriate market design and a revised regulatory framework that ensures the growing costs and risks are distributed equitably amongst all market participants, not just consumers.

“There are solutions to the many challenges faced by the energy transition, but they all come at additional cost.  The EUAA firmly believes it is unrealistic to expect consumers to bear the entire brunt of this approaching storm and that it’s time that those who cause additional costs to be incurred to pay those costs and for those in the best position to manage risk, to do so.”

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Media Contact: Emily Wood 0421 042 121

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