AEMO maps out path to 90 per cent renewables for Australia by 2040 | RenewEconomy

AEMO maps out path to 90 per cent renewables for Australia by 2040

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Australia will need at least 30GW of new wind and solar capacity to replace expected coal generator retirements, over the next two decades, and up to 47GW in the case of a “step change” scenario.

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Australia will need at least 30GW of new wind and solar capacity to replace expected coal generator retirements over the next two decades, and could require up to 47GW of new capacity in the case of a “step change” scenario that takes serious action on climate change into account.

Those are the headline numbers from the draft Integrated System Plan unveiled on Thursday by the Australian Energy Market Operator – its effort to update its 20-year blueprint on how Australia’s grid could and should be managed under a range of different transition scenarios.

These scenarios range from “slow change” – which is consistent of a world controlled by fossil fuel interests and delivers a catastrophic rise in average temperatures – all the way through to “step change”, a new scenario developed by AEMO to consider what must be done to respect the scientific experts and try to keep average global warming as close as possible to 1.5°C.

In this scenario, AEMO outlines a plan to reach around 90 per cent renewables by 2040. The bulk of this generation comes from large-scale wind and solar, supported by distributed (mostly rooftop) solar, along with hydro power, and “dispatchable” technologies such as pumped hydro, big batteries, and household batteries aggregated in “virtual power plants”.

In this scenario, black and brown coal are virtually eliminated from the grid, and gas is also priced out by cheaper and more efficient storage technologies. At least 30GW of new wind and solar will be needed, and up to 47GW, and significant amounts of dispatchable capacity.

Whatever the scenario, the key message from AEMO’s Alex Wonhas, who led the development of the ISP, is that urgent action is needed.

At least two thirds of coal generators will be gone by 2040, and Australia has fallen behind in its build out of network infrastructure and updating its market rules and regulations to facilitate the technologies that replace them. As AEMO boss Audrey Zibelman said earlier this week: “We can’t wait anymore.”

The draft ISP – which expands on the first version delivered late last year, and which won’t be finalised until the middle of 2020 – identifies a series of urgent action that is needed to accommodate the inevitable switch to wind, solar and storage, even if the pace of that transition differs in varying scenarios.

Apart from the need to build more generation capacity to replace the retiring coal generators, AEMO says the national grid will between 5GW and 21GW of new “dispatchable” generation by 2040 – and this includes battery storage, both at grid level and in households, as well as pumped hydro projects, fast-starting gas generators, and “demand side” technologies.

“The Draft 2020 ISP sets out how to build a least-cost system for Australia, but for consumers to receive the full benefit of the plan, important additional work on market design and infrastructure funding options needs to be undertaken,” Zibelman said in a statement accompanying the report.

“At the direction of state and federal ministers, the Energy Security Board is undertaking this work and AEMO looks forward to supporting it.”

The Group 1, or priority projects, are considered critical to address cost, security and reliability issues and should be either underway or commencing soon. They are also key to ensuring that the areas with the lowest cost wind and solar resources are accessed.

They include: a new interconnector from South Australia to Wagga Wagga in NSW, an upgrade to the links from Queensland to NSW, and from Victoria, and a new interconnection from Tumut to Bannaby to reinforce the southern NSW grid.

In addition, AEMO is recommending planning and approvals work be commenced now for a new transmission link from Tasmania to Victoria (Marinus Link for the so-called “battery of the nation”), to ensure it could commence construction by 2023 should that be required, most likely if there is a delay to Snowy 2.0 or a Victoria coal generator closes earlier than anticipated.

The draft ISP warns, however, that the transition, at whichever speed, will not be without issues, and needs to be both flexible and transparent.

“The complexities include the rapid introduction of increasing levels of consumer-driven DER, satisfying the critical operational needs for the power system, arrangements to replace exiting generators and deploy replacement resources ahead of, or in alignment with, those exits, low-cost but variable resources, storage, transmission investments, climate change impacts, and increasingly scarce system services.”

“The second major complexity for the Draft ISP is forecasting when existing black and brown coal plants will either reduce generation or shut down.

“The owners of these assets will make their decisions based on a range of commercial factors, and in the context of energy and climate change policies, market arrangements, competing technologies, and social and investor licences. The Draft ISP’sobjective is to maintain power system reliability and security throughout this transition.”

AEMO says the Draft ISP assumes generation investments will be guided by a well-functioning market that has appropriate signals to guide timely investments.

That in turn leads to another challenge – ensuring that the rewrite of the market design contemplated by the Energy Security Board, in tandem with the likes of the AEMC, and with the fossil fuel lobby and their pawns throwing stones at the windows – delivers what it is supposed to do – a market fit for purpose for modern technologies and which finally takes the environment into account.

As Zibelman flagged earlier this week, the amount of rooftop solar is likely to double, or even treble, over the next 20 years as households lead the “democratization” of energy and the shift from a centralized to a distributed model. This require changes that add visibility and “controls” to the way these assets function.

Household solar is likely to provide one quarter of the electricity supply by 2040, but other distributed resources such as batteries, demand management, electric vehicles will also play a critical role, sometimes aggregated through virtual power plants.

The difference in scenarios is illustrated in this chart (click on it to expand).

The 90 per cent renewables share delivered under the step change scenario may come as a shock to climate science and technology deniers within the Coalition and the right wing commentariat.

But there are signs that the Coalition hierarchy is starting to grasp the shift in energy economics, even if they continue to ignore the environment.

The recent emissions reduction path mapped out by minister Angus Taylor assumes Australia will reach 50 per cent renewables by 2030, despite his previous warnings of the economic catastrophe that would entail.

It turns out that these are the only actual emissions reductions achieved over the next 10 years. Assuming this forecast is right, then the miserable “slow change” scenario modeled by AEMO can be readily discarded.

The central model assumes no change to current state and federal policies, while the other two scenarios are driven by technological change and consumer pull (an even greater take-up of rooftop solar).

See also: Which parts of Australia deliver the cheapest wind and solar?

 

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10 Comments
  1. Connor 6 months ago

    Can you link a high resolution copy of that chart? It’s unreadable, even when clicking on it to expand it (it just shows the same sized image)

  2. Rod 6 months ago

    I do worry about the hints about a capacity market for coal.

    For households and small businesses, load switching of hot water, heating/cooling, pumping etc to high solar hours will eat into coal generation during the night further eroding their competitiveness.

  3. howardpatr 6 months ago

    All ScoalMo’s prayers, his faith and belief in miracles will not help get Australia there.

    • Chris Drongers 6 months ago

      Elon The Mighty has heard the anguish of his ScoMo in The Shire and will soon be delivering rapid progress on the 25% of Australian emissions that come from vehicles. As always, Elon The Mighty will hide his beneficance and let ScoMo the Dreadful take the credit for converting Australia’s vehicles to use the magic Blue Smoke that only becomes visible when the silent chariots die.

  4. Ken Dyer 6 months ago

    If Australia is to get serious about reducing emissions to zero by 2050, (2040 if the Greens had their way), a step change is the only way to go. Under the LNP current target scenario, based on 2019 emissions of 560MT, a 26% reduction by 2030 would leave over 400 MT’s to go.

    Currently, Australia’s 20 coal fired power stations, based on 2017-18 figures, produce over 150MT every year. it is not hard to work out that the totally inadequate emissions targets of the Morrison LNP government are totally inadequate, and if they stay with that scenario, i.e basically do nothing, then Australia’s emissions will continue to rise year on year from 560MT in 2019, to over 900MT by 2030.

    So, if Morrison and Albanese and co don’t get off their arses and do something about coal fired power stations in Australia, you ain’t seen nothing yet.

  5. Chris Drongers 6 months ago

    All very goodly but what do the punters think? The LNP in Canberra has (apparently) won an election on the scare tactic that the transition out of coal and into solar/wind/storage will cost a big number of us our high paying jobs in mines and power stations.
    What are the numbers on the annual incomes of renewables workers vs coal miners?
    And as importantly, how is Labor figuring to square the circle regarding reducing the coal industry and growing acceptance of relatively lower paying jobs and lost value in people’s investments in their houses and lifestyles based around coal mines in Emerald/Blackwater/Greenvale?

  6. Pete 6 months ago

    30 – 47 GW over 20 years. That equates to 1.5 – 2.35 GW/year on average installed capacity. It’s been reported here that over the next 12-18 months 4.2 GW is already locked in to come online, equivalent to a rate of >2.8 GW/year. So the step change scenario is actually slower than the current rate of RE deployment. Has someone got some numbers to share on the installed capacity for each year since 2016?

  7. Alan Wilson 6 months ago

    Im all for 100% or 200% RE and l dont mind paying a bit more tax to do it … l hope the LNP get out of the way and we can move quick enough to close all brown and black coal power early or covert them to gas power …. it can be done

  8. JackD 6 months ago

    The way Australia’s going with its management of Carbon Abatement (er um thanks Scott for that stewardship), a bloody large step change will be required, if we are to have any hope at all in meeting Australia’s commitment to only 1.5C rise. This notion combined with another large step change which may happen when everyone realises that we will also a mass take-up of EVs to combat ICE vehicle emissions, will mean even more RE will be needed again.

  9. Michael Murray 6 months ago

    I assume that is 90% over the year not at least 90% all the time. Because otherwise South Australia has a problem on nights like tonight during a heatwave when demand sits at 3 gig but solar is gone and wind is dead. Tonight we are lucky and a bit of wind is still working but even with that bit imports and gas are providing 85% of demand. Of course 2040 is a long way off and we might have more inter connectors, batteries, pumped hydro, solar salt storage, wind turbines in the Great Australian Bight or an HVDC cable up to the NT by then. But we might also have a lot, lot more days over 40.

    https://opennem.org.au/energy/sa1/

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