Powering Australia

An extract of remarks made to the Global Clean Energy Action Forum and Clean Energy Ministerial, Sep 22, Pittsburgh USA.

Good afternoon.

Australia is among those at the leading edge of the global energy transition.

Our core challenge, is to move rapidly away from our historic dependency on an ageing coal fired power generation fleet, and towards an energy future that is built on four things:

1. Low-cost renewable energy, taking advantage of our abundant natural resources that Australia has to offer;
2. Firming generation like batteries, pumped hydro, gas and virtual power plants to smooth out the peaks and fill in the gaps from that variable renewable energy;
3. New transmission to connect these new low-cost sources of generation to our towns and cities; and
4. A grid that is capable of running, at times, entirely on renewable energy.

As a continent the size of the United States, Australia faces some unique challenges.

The National Electricity Market, the NEM, is one of the longest electricity networks in the world. It stretches 5,000 kilometers down the eastern seaboard – roughly from here to San Francisco – supporting a population of just 23 million people.

Today, our 60 GW of generation capacity contains 23 GW of coal fired power, 12 GW of gas generation, and 25 GW of renewables like solar, wind and hydro. But despite coal being less than 40% of the NEM’s capacity, it supplies 60% of our energy.

And perhaps the most remarkable part of Australia’s energy mix, is our love affair with rooftop solar, where now one in every three houses hosts a solar system. That adds another 15 GW of behind the meter solar, which at times, is meeting up to 1/3 of all electricity demand.

And the pace of Australia’s transition brings both opportunities and challenges.

Already Australia is installing renewable energy at one of the fastest rates in the world. And to replace our aging coal fired power generators, and to meet our emissions reduction target, we need to move faster still.

At least five coal-fired power stations are set to close by 2030.

To replace that lost energy, Australia needs 45 GW of new supply. Around 36 GW of renewable generation like solar and wind, and 9GW of new firming generation like batteries, pumped hydro storage, and gas to unlock those renewables.

And to connect the volume of large scale renewable energy and firming generation, AEMO has highlighted five crucial new transmission projects in our long-range Integrated System Plan.

We’re also working hard to streamline the way new generation connects into the grid. In the last 12 months we’ve connected 4 GW of generation to the NEM, compared with 3GW the previous year, and 2GW the year before that.

Customer energy resources are also a critical part of the mix. We’ve enabled aggregators to participate directly in the wholesale market, and have a number of projects where virtual power plants are contributing directly to enable more efficient network performance.

All of this spells ‘opportunity’ for investment.

Whether your interest is in renewable energy, batteries, consumer energy devices, electric vehicle infrastructure, or networks; Australia is the place to be.

Our strong economy and skilled workforce are foundational, our governments recognise the need for investment, and our industry are already on the journey. ?

To support Australia’s rapid transition, at AEMO, we’re preparing ourselves to be able to operate our power system at peaks of up to 100% renewable generation, by 2025.

This has already occurred in the state of South Australia, where rooftop and grid scale solar and wind provided a record 138% of underlying electricity demand for a state of nearly 2 million people.

For the whole NEM, our record for renewable penetration is now 64%, broken again just a few days ago. And I expect this record to be broken time and time again, this year and next.

Firmed renewable energy, connected with efficiently delivered transmission, is the cheapest form of new build energy in Australia. By a country mile.

And the sooner Australia can integrate higher levels of firmed renewable energy, the sooner we can decouple domestic energy prices from the volatile international commodity prices that we are all experiencing.

I often say that such rapid transition into unchartered territory will only be successful if we all approach each challenge with openness and constructive collaboration, across industry, governments and the system and market operator.

And I’m proud to say that this is exactly the way we work in Australia.

Thank you.