Sydney, 7 May (Argus) — The rate of investment and construction of more power generation capacity in Australia from renewable sources such as wind and solar is exceeding the most optimistic scenario, known as step change, under the Integrated System Plan (ISP) 2020 report, according to the Australian Energy Security Board (ESB).
The scenario includes the earlier-than-planned retirement of coal- and gas-fired power plants, according to the ESB, which is charged with overseeing the ISP 2020 policy and plan for Australia’s power sector to transition to a lower greenhouse gas emissions intensive network. The ISP 2020, a blueprint authored by the Australian Energy Market Operator, discusses various scenarios that can emerge with the transition of the national electricity market (NEM) from one that is dominated by electricity supplies from coal-fired plants to a network largely dominated by power generation from renewable sources.
ESB made the comments during its release of a discussion paper on a post-2025 design for the NEM, which covers eastern Australia.
“The rapid spread of large-scale wind and solar, along with rooftop photovoltaic, across Australia means our energy system is experiencing the fastest and most substantial change in the world,” said ESB chair Kerry Schott. “We are already exceeding the step-change scenario forecast in the ISP in 2020. Our generation mix is changing fast, but the physics of our power system cannot change in the same way.”
The ISP 2020 blueprint stated that coal-fired plants could exit the NEM earlier than predicted under the central scenario, which was based on existing policies at the time. The report also stated that around 15,000MW, or 63pc, of Australia’s coal generating capacity would retire by 2040.
Australia-based and Hong Kong-owned utility EnergyAustralia said in March that it is bringing forward the scheduled closure of its 1,480MW brown coal-fired Yallourn power plant in Victoria to 2028 instead of 2032 because of falling Australian electricity prices, which have increasingly squeezed margins for ageing power plants.
Australia had set a target for 20pc of its total electricity to come from renewable sources by the end of 2020. Data from the OpenNEM platform, which tracks supply and demand of electricity in the NEM, showed that 28pc of the region’s power came from renewable sources in the 12 months to 6 May.
Another 3,200MW of solar and wind projects have been committed as of 31 March 2021 and 3,700MW of renewable projects are highly likely to go ahead following the signing of power purchase agreements or some other evidence of funding, according to Australia’s Clean Energy Regulator. Around 2,000MW of renewable energy capacity was added in 2020.
The post-2025 market design paper provided some issues to be addressed, including preparation for the retirement of coal-fired power plants by facilitating the timely entry of new generation, storage and firming capacity, as well as an orderly retirement of ageing thermal power generation units.
By Kevin Morrison
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