More than 30 gigawatts of new clean power generation will be needed over the next 20 years, as almost two-thirds of Australia's coal-fired power reaches the end of its technical life.
The Australian Energy Market Operator has released for public comment its draft “integrated systems plan” which sets out five possible scenarios for energy generation and transmission spanning the next two decades.
The plan, to be confirmed in mid-2020, will replace one endorsed by the nation’s energy ministers in 2018.
“This roadmap calls for nationally significant and essential investments in the electricity system to ensure the system meets its security and reliability requirements with the least cost and lowest regret to consumers,” AEMO chief Aubrey Zibelman said in the report.
The preferred scenario involves change being determined by a combination of market forces and federal and state government renewable energy policies and gradually winding down coal-fired power.
The report found coal generators are “expected to leave slightly more rapidly” than assumed in the 2018 plan, with 63 per cent of such generation due to come to an end by 2030.
As well, since 2018 gas and renewable generation costs had dropped while energy storage costs were slightly higher than two years ago.
AEMO says over the next two decades it expects rooftop solar capacity to at least double and possibly triple, with 30GW of grid-scale energy generation to be needed, as well as between five and 21GW of flexible, dispatchable energy (hydro or battery).
In order to make the transition as smooth as possible there would need to be better voltage control and other power system services, as well as a major overhaul of the transmission grid itself.
AEMO has identified more than 15 projects – at an estimated cost of $3.1 billion – to augment the transmission grid, including upgrades to existing interconnectors and new SA-NSW and Victoria-NSW interconnectors, and “renewable energy zones” in regional Queensland, NSW, SA and Victoria.
If the best of the transmission projects went ahead, the benefits could include $2 billion in lower fuel costs, $1.4 billion saved in deferred generation capital costs, greater competition in the market and downward pressure on power bills.