Zibelman says 18GW wind and solar in connection queue, but coal is wild card

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Australian Energy Market Operator chief confirms huge amount of wind and solar in pipeline, says biggest challenge for grid is planning around coal generation fleet.

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Australian Energy Market Operator CEO Audrey Zibelman has confirmed the huge amount of wind and solar capacity in the pipeline for Australia’s main grid, but the biggest challenge was the future of the existing coal generation fleet and the chances of some early closures.

Zibelman addressed the Future of Energy conference hosted by the ANU in Canberra on Monday, confirming previous estimates that there is some 96GW of new capacity in the pipeline – much of it wind and solar – and 18GW of projects at an “advanced stage of connection.”

However, Zibelman also said – according to people in attendance – that the major challenge facing the market operator and regulators was the future of the coal fleet, and the risk that some ageing coal generators may close earlier than planned, and with less warning than expected.

She cited Yallourn, the ageing brown coal generator in Victoria that is supposed to last until the early 2030s, but which is widely expected to close earlier. She noted Yallourn’s “modified” availability over summer – now at just 50 per cent rather than 85 per cent just a few years back.

This is of critical importance for AEMO, which is facing a long hot summer with concerns about the reliability of the local coal fleet, and some gas generators. One Loy Yang A unit has been out for months and is due back in mid-December, while one unit at the Mortlake gas generator has also been sidelines and is due to return to service this month.

AEMO this week is expected to release its “summer readiness” report, outlining the actions it has taken to keep the lights on this summer.

This will include its reserve trader mechanism – signing up major consumers or emergency generators to either reduced their energy demand or switch on back-up supplies if needed. But AEMO has warned that while the reliability standard may not be broken, there is the prospect of “tail-risk” events when everything goes wrong and some load-shedding, as occurred last January, occurs.

The summer readiness report will be followed by the draft version of the Integrated System Plan, which serves as a 20-year blueprint to manage the expected and inevitable changes in the grid as coal generators retire, to be replaced by wind, solar, various forms of storage and ‘demand side” technologies such as batteries and load management.

Zibelman said that while there is widespread agreement on the nature of the future energy system – that it will be decarbonised, decentralised, and digitised – there is much work to do to successfully execute the transition.

The ISP identifies major transmissions investments that are required to upgrade the ability of states to trade between each other, and the need for more visibility and controls over “behind the meter” technologies such as rooftop solar and batteries, so that they can be managed and contribute to grid reliability rather than the opposite.

The final version of the ISP is not expected to be delivered until June, 2020, but the draft version is likely to be near the top of the agenda at the next scheduled meeting of COAG energy ministers in March.

 

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