AEMO releases 25-year roadmap for Australia’s energy transition
The Australian Energy Market Operator has unveiled a comprehensive 25-year roadmap aimed at transitioning the National Electricity Market to net zero by 2050. The Integrated System Plan is the culmination of two years of consultation, analysis, and review, involving 2,100 stakeholders, 85 presentations and reports, and the consideration of 220 formal submissions.
The ISP underscores that renewable energy, integrated with transmission and distribution, firmed with storage, and supported by gas-powered generation, represents the most cost-effective approach to supplying electricity to homes and businesses as Australia moves towards a net zero economy.
The urgency to renew the NEM is driven by the phased closure of Australia’s remaining coal-fired power stations. Since 2012, ten large coal-fired power stations have closed, and the ISP projects that 90 percent of today’s capacity will be shut down by 2035, with all closures occurring before 2040.
The centrepiece of the plan is the Optimal Development Path, which includes a mix of replacement grid-scale generation, storage, and transmission. The ODP represents the least-cost path to meet federal and state government energy policies on emissions reductions, with an annualised capital cost of $122 billion to 2050.
“The ISP is a roadmap to navigate Australia’s power system through the energy transition, providing Australians with reliable electricity at the lowest cost,” said AEMO CEO Daniel Westerman. “A record number of stakeholders have contributed to identifying the most efficient development path of generation, storage and transmission investments, critical to meet consumer energy needs as Australia transitions to a net zero economy by 2050.”
The plan’s key messages align with previous editions, which AEMO produces biennially under Australian energy laws. These laws also dictate the ISP’s content, including government policies and targets. The ISP does not model nuclear power, as it is not government policy and is prohibited by current Australian laws.
“Australia’s energy transition is well underway, with renewable energy accounting for 40% of electricity used in the past year,” Westerman noted. Consistent with previous reports, the plan identifies almost 10,000km of new transmission lines required by 2050 to connect new sources of generation and meet reliability targets at the lowest cost to consumers.
Ten projects, covering 2,500 km, are already in progress, and the plan identifies seven additional projects that should now move forward through planning and delivery stages. AEMO acknowledges the need for early community engagement and effective consultation on these projects.
The transmission projects, costing $16 billion, are expected to recoup their investment costs and save consumers $18.5 billion in avoided energy costs, along with delivering emissions reductions valued at an additional $3.3 billion. Building and maintaining energy infrastructure over the next 20 years is expected to support more than 60,000 energy jobs.
Gas plays a crucial role in the energy transition, providing backup electricity generation during periods when renewables are unavailable. This contribution is integral to the ISP. The roadmap also highlights the importance of consumer energy resources, including domestic rooftop solar panels, batteries, smart systems, and electric vehicles. Home batteries, if well-coordinated, can save consumers around $4.1 billion in avoided costs for additional grid-scale investment.
“Consumers are already a driving force in Australia’s energy transition and this is set to continue. If consumer devices like solar panels, batteries, and electric vehicles are enabled to actively participate in the energy system, this will result in lower costs for all consumers,” Westerman said.
The ISP also addresses the challenges and risks to the energy transition. Planned projects are facing delivery challenges, including approval process delays, investment uncertainties, cost pressures, social licence issues, supply chain disruptions, and workforce shortages.
“There is a real risk that replacement generation, storage, and transmission may not be available in time when coal plants retire, and this risk must be avoided,” Westerman stressed. “This ISP is a clear call to investors, industry, and governments for the urgent delivery of generation, storage, and transmission to ensure Australian consumers continue to have access to reliable electricity at the lowest cost.”
For more information visit www.aemo.com.au
source: https://tanknewsinternational.com/aemo-releases-25-year-roadmap-for-australias-energy-transition/
