AEMO ready for summer heat after finding 2GW of new capacity

The Australian Energy Market Operator has declared it is ready for summer after doing all it can to prevent blackouts this summer after finding nearly 2GW of new capacity and improving its systems.

AEMO has launched a comprehensive campaign, which in tandem with initiatives from the state and federal governments has resulted in more than 800MW of re-opened gas generators, nearly 900MW of demand response, and nearly 300MW of temporary diesel generators.

It has also welcomed the new Tesla big battery in South Australia, clarified and refined intervention powers for the South Australian and NSW government, provided added training to its own operators, and tried to make sure the fossil fuel fleet is in as best condition it can be.

But while it says it should be able to meet reliability standards, it’s underlined the fact that the biggest threat to supplies this summer will be the unexpected outage of major equipment, most likely the failure of a transmission line – in storm or bushfire – or the failure of a gas and coal plant.

That much has been underlined in recent weeks, particularly in Victoria, where the absence of three big coal units totalling 1,500MW (most of it unexpected) has forced AEMO to issue several low level warnings of potential supply issues in the last week.

AEMO is under intense scrutiny after the failures and outages in the past 13 months – from the state-wide blackout in South Australia in September, 2016,, to the load-shedding in two states in February this year and near misses elsewhere.

New CEO Audrey Zibelman, who took over after these events, is not guaranteeing that the lights can stay on 100 per cent of the time, or even the legislated reliability factor of 99.998 per cent of the time, but makes clear that any such promise would be fraught with danger.

Zibelman said that for AEMO, “regaining consumer confidence in the reliable operations of the system this summer is a crucial and fundamental first step in regaining confidence in the whole of the NEM.”

It’s also fundamental for the future direction of the grid. While the S.A. blackout was used by conservatives as an excuse to attack renewables, what has become clear that the biggest danger to supply was the ageing infrastructure and out-dated practices.

Fossil fuel advocates have made it clear they will seek to blame renewables whatever the reason for lights going out. That much was made clear by former deputy prime minister Barnaby Joyce, whose electorate is probably home to more renewable energy projects than any other.

He told the Clean Energy Summit earlier this year that the biggest threat to the industry (apart from the Coalition’s own policies), was the lights going out in Sydney.

Zibelman also used the AEMO report to make clear her vision of the future. As she has said previously, this future resolves around the inevitability of more renewables, the use of more demand response, and changes to the way the grid is managed and the rules are set.

Notably, the AEMO document made no mention, even on the chapter on future plans, of the National Energy Guarantee.

Zibelman is known to favour “day-ahead” markets, which would hold fossil fuel generators in particular accountable for availability, and impose penalties on any that suddenly decided to withdraw capacity at the last minute for spurious reasons, as the big generators have been accused of doing by politicians, network operators, consumers and regulators.