Australia

What you need to know about the ‘once-in-a-century’ plan to transform Australia’s energy market

Australia’s energy transformation future has been mapped out by the Australian Energy Market Operator (AEMO) as its grapples with challenges over the security of electricity supply and costs on consumers.
details how the country can wean off fossil fuels onto renewable energy – bringing an end to Australia’s reliance on coal through some $320 billion in investment in what’s been described as a “once in a century” transformation.

The market operator has called for work to start immediately on upgrading the electricity grid’s transition to renewables and transition off fossil fuel by 2050.

READ MORE

It has projected the grid that serves the eastern states – including South Australia – would require 10,000 km of new transmission lines to help link up a nine-fold expansion of wind and solar power by 2050 to ensure this can happen as soon as possible.
To support this growth, the grid will also need to triple the amount of firming capacity (energy guaranteed to be available), through pumped hydro, batteries and gas plants, as coal generation exits the market.
David Leitch, energy policy expert at ITK Consulting, said the plan outlined the best way to decarbonise the electricity generation system into the future.
“To do this properly requires a lot of investment and a lot of support from federal to state governments,” he told SBS News.
“It’s by everyone getting on the same path that we will end up doing this smoothly with the least disruption.”

What does the plan say?

Solar panels in a rural setting

Solar panels at solar farm on the northern outskirts of Canberra. Source: AAP / MICK TSIKAS

Electricity cost

this winter as cold temperatures combined with global shocks to the energy market because of the war in Ukraine.
AEMO CEO, Daniel Westerman, said the regulator’s report was based on two years of collaboration with industry, stakeholders and government.
“It outlines the investment needed to provide reliable secure affordable energy to Australian homes and businesses,” he told reporters on Thursday.
“Australia is experiencing a once-in-a-century transformation to our energy systems.”
But the AEMO’s findings do note the because of its disruption of supply chains.
It maintains this has only strengthened the case for a shift to renewables and promoted ensuring energy sustainability as a “matter of great national urgency”.
The report notes: “the potential for firmed renewables to protect consumers from global commodity shocks.”
AEMO’s report says when this transformation is successful, it will deliver low-cost renewable electricity with “reliability and security.”
It adds that this will also help meet climate targets and contribute to regional jobs and economic growth.
Mr Leitch said AEMO’s plan would see the electricity price remain “roughly where it is” and consumers were unlikely to face higher prices in the medium or long term.
“There will be more transmission costs, but lower fuel costs, because we don’t have to pay for any coal and gas once you fully decarbonize the system,” he said.
Coal currently provides up to 54 per cent of Australia’s electricity, according to government data.
But the AEMO predicts nearly two-thirds of this power capacity will be shut down by 2030.
AEMO’s plan also projects more Australians will help support the energy transition by reducing their own reliance on the grid.

The market operator estimates more than two thirds of individual homes and businesses will install solar panels – up from about 30 per cent now.

Reliability

, the AEMO says investment is needed to avoid future volatility.
According to the AEMO, five major energy projects across NSW, Victoria and Tasmania need to be built “as urgently as possible.”
Together, they will cost $12.8 billion, but are considered fundamental to supporting future electricity generation and storage.
AEMO also forecasts annual electricity consumption from the grid will double by 2050, as more transport, heating, cooking and industrial processes are electrified.

The regulator says this demand is why investment is needed to treble the firming capacity provided by new low-emission alternatives.

READ MORE

Gas-fired generation will remain required until 2050, meaning that older and less efficient peaking plants (plants that operate during periods of peak demand) may need to be replaced.
Professor Ken Baldwin from the Australian National University said he believed the AEMO’s proposed transition to renewables was realistic, given Australia’s already high rates of adopting solar and wind per capita (or per person).
“The Australian energy transition is sitting at a very rapid rate. In fact we are transitioning at the most rapid rate of any country in the world,” he told SBS News.

“What this means is we will see a rapid exit of particularly coal fired power stations over the next decade or so and their replacement by wind and solar energy.”

Climate targets

Australia has committed to a net zero emissions target by 2050.
The new Albanese government has also adopted a 43 per cent emissions target by 2030 based on 2005 levels – more ambitious than its predecessors.
The report also says almost all industrial sectors have expressed their intent to achieve net zero emissions by 2050, placing confidence in the viability of electric alternatives.

In a statement, Energy Minister Chris Bowen said the AEMO’s report had confirmed the national energy market “urgently needs investment in transmission and planning to ensure reliability and affordability through this change.”

Energy Minister Chris Bowen speaks at the National Press Club.

Climate Change and Energy Minister Chris Bowen says the energy market needs urgent investment. Source: AAP / BIANCA DE MARCHI/AAPIMAGE

He pointed to his government’s planned $20 billion spend under its Rewiring the Nation plan to modernise the electricity grid as investment “designed to provide necessary low-cost financing for the urgent upgrade and build out of the grid.”

Professor Baldwin said despite the “eye wateringly” large amounts of private and public investment required to secure the energy transition, projections showed pursuing the option would still be cheaper than investing in more fossil fuels.
“Australia’s integrated systems plan is aiming to achieve net zero emissions by 2050,” Professor Baldwin said.

“This will happen by basically electrifying the entire economy and turning the electricity generation itself from [mainly] fossil fuels to dominantly renewable energy.”

 Source link

Back to top button
SoundCloud To Mp3