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30 July 2020

AEMO says “We need more renewables, BES and DER,” not coal

The Australian energy Market Operator (AEMO) has published an integrated system plan which has embarrassed its political masters, suggesting that no new coal resources are needed, and precious little gas right now, because renewables are doing such a good job.

The Coalition which is in power, made up of an alliance of center-right political parties, has consistently issued mixed messages on CO2 reduction, and on occasion has been almost Trump like in their love of coal mining and have toyed with climate change denial.

AEMO’s Managing Director and CEO, Audrey Zibelman said, “The ISP analysis confirms that as our coal plants retire, the least-cost transition of the National Electricity Market will be to a highly diverse portfolio consisting of distributed energy resources (DER) and variable renewable energy (VRE), supported by multiple dispatchable resources,” Zibelman said.

Zibelman has taken the IRP through extensive consultation, and published a draft back in December, and this is now the final edition.

The main changes are that distributed energy resource is expected to double or even triple, providing 13% to 22% of total underlying annual energy, variable renewable energy should add more than 26 GW to replace coal-fired generation, and 63% of coal-fired generation should.

What Zibelman refers to as dispatchable resources to back up renewables need to grow by between 6 GW and 19 GW and she says this can be met with utility-scale pumped hydro and battery energy storage, with some fast responding gas-fired generation, additional demand response and aggregating DER as a VPP.

The grid itself needs some strategically placed interconnectors, coupled with firming resources, to balance intermittent resources and she wants to build a minor upgrade to the existing Victoria ‒ NSW Interconnector by 2022-23 and add a new 330 kV double-circuit interconnector between South Australia and New South Wales, on target for 2024-25. Another 500 kV transmission upgrade is needed to reinforce the NSW southern shared network and increase capacity between the Snowy Mountains hydroelectric scheme and the region’s demand centers, on track for completion in 2025-26 and a Central-West Orana Transmission Link to support the development of the Central-West Orana due for completion in 2024-25.

She also said she would like to build a HVAC interconnector between Victoria and NSW and two new HVDC cables connecting Victoria and Tasmania.

There is every chance that the government of the day will try to push back on this plan, and may even criticize it publicly. AEMO said that this plan will deliver around A$11 billion of benefit to its customer base.