AEMO: reliability gaps and disruption imminent

On 31 August 2022, the Australian Energy Market Operator (AEMO) released its 2022 ESOO (Electricity Statement of Opportunities).?The report provides market data for the National Energy Market (NEM) over a 10-year period and is designed to inform planning and decision making by key market players.?

?Reflecting on the current operational challenges in Australia’s energy market, the report includes reliability forecasts with significant gaps for all east coast regions as demand outstrips supply.?AEMO says that without additional investment beyond present commitments, some reliability gaps are forecast to hit as early as 2023.??

?The good news is that Australia has a promising pipeline of upcoming renewable energy, storage and transmission projects that can address these forecasted gaps if they come online as and when expected.?See our recent article on progressing five priority transmission projects worth $12.7 billion here.

?With the NEM expecting at least five coal-fired power station closures within the next decade, AMEO says “the investment need is pressing and widespread”.?Even with the strong pipeline of upcoming developments, AEMO says that projects must progress urgently to a “committed status” in order to effectively support Australia’s energy transition.?If that happens, all regions are forecast to be within the relevant reliability standards until at least 2029, when further coal-fired power stations are set to close.

?The ESOO is the second siren sounded by AEMO in as many months, highlighting the need for Australia to urgently progress upcoming generation, storage and transmission projects to avoid these imminent and costly disruptions.?And the market would do well to pay attention.?

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