“Australia already has the technical capability to safely operate a power system where three quarters of our energy at times comes from wind and solar energy generation,” Zibelman says in a statement accompanying the report.

“However, to do so requires changes in our markets and regulatory requirements. Otherwise, AEMO will be required to limit the contribution of these wind and solar resources to 50 or 60 per cent of electricity supply at any point in time, even though they are the lowest cost way of providing electricity,” she warned.

Wind and solar have recently accounted for close to 50 per cent of supply in the National Electricity Market in some trading periods (more than 50 per cent including hydro, and up to 140 per cent wind and solar in South Australia), although there have been some 5-minute intervals where wind and solar has already exceeded 50 per cent.

Zibelman is looking for major changes to the market design in the work currently being led by the Energy Security Board. Most of all, AEMO wants great flexibility, but is also pushing for what are known as “ahead” markets, ensuring the operator has better visibility of what supply will be available, and wants to create new markets for key services such as “inertia” and voltage, as RenewEconomy reported last week.

AEMO is also looking to replicate much of the recently released distributed energy roadmap in Western Australia in the nation’s main grid, and is pushing for new inverter standards that will increase the ability for rooftop solar system and battery storage to be harnessed and aggregated to provide energy and grid support.

This is critically important because consumers – both household and business – are clearly going to switch in even greater numbers to rooftop solar, and other technologies like battery storage and electric vehicles. Rooftop solar is tipped to reach 85 per cent of instantaneous penetration in South Australia within a few years, and well above 50 per cent in Victoria and Queensland.

The rollout of new transmission lines to help transport growing amounts of wind and solar to where it’s needed is also a key element, although it has largely been discussed in the ISP.

The RIS is a significant document, particularly in a country where the energy debate is constantly de-railed by vested interests and ideologues who still insist that it is impossible to accommodate high levels of wind and solar. The Liberal donor and coal plant operator Trevor St Baker is chief among them, and has a willing audience in the ranks of the Coalition government and Murdoch media.

AEMO, which is responsible for managing grid and keeping the lights on, debunks this and says there is no reason Australia cannot have a very high level of renewables:

“Beyond 2025, AEMO has not identified any insurmountable reasons why the NEM cannot operate securely at even higher levels of wind and solar penetration, especially with ongoing technological advancement worldwide,” it notes.

Indeed, its ISP maps out a path – mostly through infrastructure – to accomodate a 90 per cent share of renewables in Australia’s main grid by 2040.



That is an annual share, not just an “instant” penetration. And so that means that on many occasions there will be well in excess of 100 per cent wind and solar (compared to demand requirements) that will need to be stored – in batteries, in pumped hydro, or even in hydrogen electrolysers as suggested by the Australian Energy Renewable Agency this week.

Zibelman adds in an interview with RenewEconomy: “The challenge is that it was difficult to envision the internet before the internet came, and smart phones before the arrival of smart phones. We see these changes because we experience them every day.

“Ultimately, the issue is this – we want electricity to remain affordable, reliable and secure …. we need to adapt so the consumers can get the benefit of the technical innovation. That’s really our goal.”

The focus and intent of the RIS is a call to action to ensure that – given the pace and complexity of change in the NEM – Australia’s traditional slow moving regulatory institutions can create a highly flexible market and regulatory framework that can adapt swiftly and effectively as the power system evolves.

The list of “things to do” outlined by AEMO in the report – the product of a nine-month work program by the seven-strong Future Energy Systems team, and a big cast of outside consultants and review panels – is long and complex.

There are 16 major actions that it proposes – from updating inverter standards, to ensuring enough frequency and voltage control, minimum system strength, and the creation of new markets, that must be in place ove the next five years, many of them within one or two years.

The prediction that Australia’s main grid – which covers South Australia, Victoria, Tasmania, NSW and Queensland – will experience up to 75 per cent “instantaneous” wind and solar is based on AEMO’s “central” scenario in its ISP, which assumes current policy settings. In the “step change” scenario, dialling in increased efforts to reduce emissions, the share of wind and solar could hit 100 per cent wind and solar in the NEM by 2025.

But the report warns that constraints will be imposed to limit the share of wind and solar to between 50 and 60 per cent unless the AEMO wish list is delivered. Zone B indicates constraints that could be imposed due to the lack of inertia and system strength, while Zone C identifies a shortfall in “synchronous” capacity.

The document says operation in Zone C, with up 100% of renewable generation operating securely, is “theoretically achievable” in the future. This would, however, require more advanced methods of system operation, coupled with provision of essential system services to ensure adequate system flexibility, frequency, and voltage management.