Cut and paste...."The nation’s energy market operator is poised...

Cut and paste....


"The nation’s energy market operator is poised to issue a stark warning about threats to supply in the electricity grid and will make an urgent call for business and investors to proceed with planned generation projects amid concern about a rough transition to green power.

The Australian Energy Market Operator will issue its 10-year outlook for the market – the Electricity Statement of Opportunities – before the end of August.

Industry sources expect the forecast to spell out ongoing reliability risks in the system, including a potential crisis this summer, along with the need for industry to urgently approve a pipeline of developments.

The document will be closed scrutinised by the NSW government as it nears a decision on Origin Energy’s Eraring coal-fired power station, which could close up to seven years early in mid-2025.

The AEMO report is developed through consultation with Australia’s energy industry, and the market operator is expected to warn of larger potential shortfalls if significant progress on urgent projects is not made.

AEMO last year said every state within Australia’s National Electricity Market could experience shortfalls in supply over the next decade, with South Australia potentially first by 2024.

An update in February said Snowy Hydro’s delay in delivering the Kurri Kurri gas plant had increased theunreliability of the NSW gridin 2024.

The vulnerability of Australia’s LNG export industry also looms as a fresh headache for the Albanese government after a ratcheting up of industrial action over the weekend.

Unions representing Woodside Energy’s LNG offshore platform workers have given the gas major seven days’ notice they intend to take industrial action to stop gas exports unless enterprise bargaining claims are resolved by Wednesday.

The threat of industrial action caused chaos on global energy markets earlier this month, with European gas prices surging as much as 40 per cent.

On the east coast, AEMO’s concern over supply shortfalls could lift the cost of electricity – which eventually flows through to households and businesses – and could even threaten grid stability. Blackouts are irregular, and AEMO could use emergency powers to restrain heavy users to mitigate the dangers when there is only a small shortfall.

Origin Energy’s Eraring power station in NSW could close up to seven years early in mid-2025. Picture: Hollie Adams

The latest annual AEMO report will also now factor in the delays to Snowy Hydro 2.0.

Snowy Hydro earlier this year said the huge project, critical for Australia’s energy transition, would be delayed by up to two years.

Snowy 2.0 will provide 2GW of capacity to underpin a system that will be increasingly dominated by renewable energy.

The project has been beset by delays and cost blowouts, but it is critical as Australia struggles to develop firming capacity to smooth out intraday volatility, which is growing amid an influx of renewable energy.

The AEMO report will also include for the first time AGL Energy’s planned closure of its Bayswater coal power plant in 2033.

AGL in September 2022 bowed to shareholder pressure and accelerated its exit from coal. It said it would close its Loy Yang coal power station – the biggest emitter in Victoria – in 2035 and Bayswater no later than 2033.

Loy Yang’s closure will fall outside of the 10-year outlook in the latest instalment of the report.

A downbeat outlook from AEMO will intensify concerns about Australia’s energy transition. The federal Labor government has legislated a target of having renewable energy generate 82 per cent of the country’s electricity by 2030 to replace ageing coal generation, which is under sustained economic and social pressure.

Australia is struggling to build renewable energy generation and high-voltage transmission cables quickly enough, with big projects suffering from delays that will be factored into AEMO’s forecasts.

About 10,000km of transmission cables must be built to carry renewable energy across the grid, but pockets of local opposition have delayed the infrastructure.

NSW’s plan to create zones to house renewable energy generators – cornerstone elements of its plans to transition away from fossil fuels – faces multi-year delays as the state struggles to secure local support.

The first green zone to be constructed will be Central-West Orana, but that is now not likely to generate energy until 2027.

The AEMO outlook is expected to heighten pressure on the NSW government and Origin Energy to extend the lifespan of the Eraring power station, which provides about a quarter of the state’s energy needs.

Eraring is due to close in 2025, but the state government is under pressure to ensure there is adverse effect.

Origin has said its timetable has not changed but will review the market to determine the impact if it shuts in 2025.

Origin chief executive Frank Calabria told The Australian last week a decision on Eraring would need to be made this year.

An extension would quell concerns about power price increases but would dent Australia’s capacity to meet its 2030 target to reshape its energy grid and reduce carbon emissions."