The Australian Energy Market Operator is hailing the “start of a new era” as it bulks up with a much increased budget to support the planning, engineering and management work needed to transition Australia’s coal-dominated grid to one based around renewables and storage.
“Our world is changing at speed and scale, and ongoing change is expected to dominate Australia’s energy future,” the operator says in its new corporate plan.
“Traditional power system operations, regulations and market functions are being challenged as the provision of secure and reliable energy becomes more complex.”
To help meet those challenges, AEMO has secured a significantly higher budget of $434 million, up from $314 million in the last financial year, with most of the increase going to manage the main grid.
It justifies this by the need to throw more resources at the complex engineering challenges of managing a grid dominated by wind and solar, the switch to 5-minute settlements, IT upgrades, data management and the post 2025 market rule changes.
Chief among these “novel” challenges is to develop the knowledge and expertise, and engineering solutions, to manage a grid that could be powered – at times – by wind and solar only within three years.
It says a portfolio of technologies will be required to meet these challenges: utility-scale batteries, hydro storage, gas-fired generation, smart behind-the- meter batteries, energy efficiency measures, virtual power plants and vehicle-to-grid services from electric vehicles.
These will be complemented by flexible loads and wholesale demand response to manage peaks and troughs.
“Society clearly expects the pace of change to accelerate,” CEO Daniel Westerman and chairman Drew Clarke say in the introduction to the corporate plan.
“This means (AEMO) faces the challenges of operating Australia’s electricity grids at higher levels of renewable power sooner, and with greater urgency.
“The challenges of maximising renewables in the system are multiple, complex, have interdependencies and
will require collaborative spirit between governments, regulators, industry, and communities on a scale more accommodating than at any time in the past.”
Chief among the challenges is to manage the replacement of coal, which now makes up two thirds of generation in the National Electricity Market, but which will be replaced by vast amounts of wind, solar and storage over the coming eight years.
The corporate plan highlights (see graph above), a near trebling of wind and solar capacity to 44GW by 2030, and a seven fold increase in storage (of varying durations) to 15GW.
“Real world experience is bearing out accelerated closures, as renewables increase commercial pressures on the future of these power stations,” the report says.
“The power system needs to be prepared for the withdrawal of coal generation and ways to replace the steadying effect big rotating turbines have on the electrical attributes of voltage and frequency.”
The AEMO corporate plan also flags a “broader” and potentially national ISP that would combine the main grid (the NEM), with the WA grid, known as the SWIS, but doesn’t go into more details of what that would look like.
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