This article is more than 3 years old

This article is more than 3 years old

Australia’s Energy Market Operator says the introduction of more renewable energy is helping secure Australia’s electricity grid but that “new approaches” will be needed to avoid blackouts in coming years.

The report comes as the prime minister, Malcolm Turnbull, confirms the government is seeking to extend the life of Australia’s oldest coal power plant, Liddell, and is in talks with owners AGL.

However that idea was shot down almost immediately by the chief executive of AGL, Andy Vesey, who tweeted a response to former PM Tony Abbott assuring him of AGL’s commitment to closing the Liddell power station by 2022.

Andy Vesey (@AndyVesey_AGL) .@TonyAbbottMHR We're getting out of coal. We committed to the closure of the Liddell power station in 2022, the end of its operating life.

In its annual Electricity Statement of Opportunities, Aemo found the risk of electricity supply failing to meet demand drops in scenarios where more renewable energy is driven online by state-based renewable energy targets.

The report finds that the highest risk of an undersupply of electricity (USE) occurs in the coming summer of 2017-18 in South Australia and Victoria. But it finds that, as more renewables come online in following years, that risk is progressively lowered.

It also finds that there is a potential for an undersupply of electricity in NSW after 2022, when the coal-fired Liddell power station is slated to close. But the report says: “Aemo’s analysis shows that renewable generation can provide some support to maintain reliability even without firming capability.”

Aemo notes that the introduction of those renewables needs to be carefully managed. “However, if this renewable development was to lead to earlier retirement of existing thermal generation, the risk of USE would increase without additional firming capability,” the report says.

Meanwhile, the report finds there is no material risk of undersupply of electricity in Queensland or Tasmania in the coming 10 years.

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The government continues to sit on another Aemo report about Australia’s dispatchable electricity needs, which the minister for the environment and energy, Josh Frydenberg, has said it requires before it can decide whether to implement the Finkel review’s key recommendation of a clean energy target (CET).

Frydenberg has described aspects of the report to News Limited but not yet released it. And in response to the as-yet unreleased report, Turnbull said he is in discussion with AGL to keep Australia’s oldest currently operating coal-fired power station, Liddell, open for for another five years beyond its slated closure date of 2022.

Labor’s Mark Butler criticised the delay in response to the Finkel recommendation of a CET and said it was partly responsible for power rises.

“The investment strike in new electricity generation will continue as long as the prime minister fails to stand up to the extreme right of his party and adopt a well-designed CET,” Butler said. “It’s the prime minister’s weakness and inaction which is driving prices ever higher, growing pollution and increasingly putting the supply of the system at risk.”

It was previously been reported that AGL had refused to keep Liddell open longer because of the carbon risk and the investment required.

But in releasing the first report, the chief executive of Aemo, Audrey Zibelman, said “new approaches” were needed to ensure Australia had enough dispatchable electricity.

“The power system does not have the reserves it once had, and therefore to balance peak summer demand in real time, targeted actions to provide additional firming capability are necessary to reduce heightened risks to supply,” Zibelman said.

Aemo flagged the need for “targeted actions” including 1GW of “strategic reserves” across Victoria and South Australia, as well as innovative demand-response programs to reduce the risk of blackouts.

Zibelman said Aemo was indifferent to which fuels or technology were used.

The report modelled two scenarios for increased renewable energy in the next decade, one where states drove the expansion alone, and one where it was nationally coordinated.

Both scenarios increased the system’s reliability, but the the nationally coordinated scenario drove more renewables, spread them out further, and resulted in a more reliable grid.