Big battery summer: AEMO says new storage capacity to play key role in keeping lights on

More than 3 gigawatts (GW) of new solar, wind and big batteries will help power Australia through another hot and potentially wet summer, with a nearly 60% jump in available storage capacity expected to play a particularly important role in the reliable supply of electricity over the period.

The 2024-25 summer readiness report published by the Australian Energy Market Operator on Tuesday says weather conditions and synchronous generation availability – coal, gas and hydro power – are both expected to be fairly similar to the 2023-24 summer.

What is different this summer is that 3,175 megawatts (MW) of new generation and storage projects have been
commissioned to full output in the NEM since September last year, including more than one gigawatt of grid-scale solar (1,010 MW), 940 MW of wind and 750 MW of batteries (with various levels of storage).

AEMO says a further 750 MW of projects are on track to reach full capacity in December, providing further generation for when the grid “needs it the most.”

The story is much the same for the separate Western Australia grid, called the WEM, where the Collie and Kwinana 2 batteries will have a capacity of around 425 MW now that they are fully operational.

“In the last week of spring, challenging operational conditions emerged in New South Wales, with limited localised issues and no widespread customer impacts,” says AEMO’s executive general manager of operations, Michael Gatt.

“Batteries played an important role in managing that situation, so it is pleasing that ahead of summer available battery generation has grown by 58% across the NEM,” Gatt says.

Indeed, in a first, AEMO last week called on two big batteries in NSW – including the newly connected but not yet fully commissioned Waratah Super Battery – to stand ready with a certain level of charge in case they were needed.

This is likely to be repeated this summer. The Waratah battery – at 850 MW and 1680 MWh – will be the biggest in Australia once commissioned, and in fact will be the biggest unit in terms of capacity ever connected to the Australian grid, including coal, gas and hydro plants.

Of course, the summer period will not be free from risks, which – as illustrated in the AEMO graphic below – range from the impacts of extreme weather, to generator and/or network outages, reduced weather-related generation (including the risk of plant coal plant cut-out or capacity derating due to extreme heat), and high demand.

There is also a list (below) of network and generation assets – mainly fossil fuel plants – being watched for the potential for their maintenance and commissioning activities to extend beyond target completion dates.

Further, there is also the risk of too much solar in the system, as a result of sunny days with mild temperatures and low demand – a combination more common in spring, when air conditioners are less likely to be running full tilt.

AEMO says it has prepared procedures for managing minimum system load conditions on such days as these – as has been widely reported already this week – and might need to take action if outage conditions and low system load conditions happen to collide.

All told, the reliability gaps already forecast by AEMO for the summer period remain very manageable, at 265 MW in New South Wales, 200 MW in South Australia and just 10MW in Victoria (10 MW).

AEMO says it is tendering for Interim Reliability Reserves (IRR) to address the gaps in New South Wales and South Australia and has emergency reserve providers are on standby to address short-notice requirements across the NEM.

In Western Australia, AEMO is tendering for up to 285 MW in supplementary capacity, with contracts to take effect from 1 December 2024.

“We’ve had a strong response to the supplementary capacity tender, and once we have finished negotiating those contracts, AEMO will publish the amount procured,” Gatt said.

On gas generation, the report says that while this will be “crucial” in providing peak generation capacity to the NEM over summer, the increase in renewables has meant increased uncertainty around forecast demand for the fossil fuel.

“This will depend on weather, [variable renewable energy] performance, operational demand and the utilisation of new large-scale battery storage,” the report says.

Interestingly, the chart below forecasts slightly more gas use than the past two summers for January, 2025, but then quite a bit less for February and March than previous years.

AEMO this year has also provided a handy Fact Sheet on Lack of Reserve (LOR) notices, presumably to stem the tide of blackout hysteria that has carried away the mainstream media over the past two weeks.

As it notes, there is a big difference between a “forecast LOR” – the three-stage process where AEMO alerts the market to a reduced amount of electricity reserves – and an “actual LOR,” when low reserves become a reality and load shedding needs to be activated.

The market operator quite often issues LOR 2 notices, which have been known to trigger news reports of imminent or barely avoided blackout notices when this is not technically the case.

“At this level, there is no impact to the power system,” the sheet says, “but supply could be disrupted if a large incident occurred.

“Once an LOR2 is declared, AEMO has the ability to direct generators or activate reserve mechanisms to improve the supply-demand balance,” it says.

It’s all about managing the risks – both ahead of time and as they arise.

“While we’ve undertaken extensive preparation ahead of summer, risks remain and AEMO will continue to monitor the situation and take the necessary actions if required,” Gatt says.