New renewable energy and battery projects should help the power grid this summer although gas supplies will need to be monitored closely during demand peaks, the Australian Energy Market Operator said.
In its industry briefing for the five months from the start of November, released publicly on Tuesday, Aemo said “reserve shortfalls could arise if higher demand periods coincide with unplanned generation outages and transmission limitations”.
Temperatures were likely to be similar to last summer for most of Australia although this year’s near-La Nina conditions increase the potential for above-average rainfall and floods, said Michael Gatt, an Aemo executive.
Gas storage levels were recovering after winter, however, any extra drawdown to support peak electricity demand would need to be replenished before next winter, Aemo said, adding supplies of the fuel “need to be carefully managed” to ensure availability during periods of high demand, particularly in Victoria.
Last week, the grid in New South Wales was strained by an early season heatwave that set November records in western Sydney. One leading analyst viewed the prospect of major outages this season as a “toss-up”, with Aemo declaring a lack of spare capacity in NSW yesterday evening.
New capacity coming on line should help avert power outages in the wider national electricity market (Nem). Since September 2023, 3.175 gigawatts of generation and storage has come online, including just over 1GW of new solar farms and 940MW of windfarms. Another 750 megawatts of projects were due to be added by this month.
“Batteries played an important role in managing [last week’s NSW] situation, so it is pleasing that ahead of summer available battery generation has grown by 58% across the Nem,” Gatt said.
Electricity demand spikes during heatwaves particularly if they arrive during week days and outside the Christmas-New Year holiday period. As of the end of October, the Bureau of Meteorology had identified much of Australia as likely to endure unusually warm spells this summer, including Melbourne and Brisbane.
Aemo had other steps to take to avoid blackouts during high-demand periods. The operator had issued tenders for 475MW of additional supply to close forecast “reliability gaps”, mostly in NSW and South Australia.
Aemo had already activated its so-called Reliability Emergency Reserve Trader last week, paying at least one bigger electricity user to power down during last week’s period of stretched supplies.
The operator could also resort to cancelling planned outages for maintenance on transmission lines to maximise short-term electricity supplies.
“While we’ve undertaken extensive preparation ahead of summer, risks remain and Aemo will continue to monitor the situation and take the necessary actions if required,” Gatt said.
Those preparations, though, are limited by the vagaries of weather, with extended cloudy or calm periods curtailing generation from solar and windfarms.
Unplanned outages by the country’s ageing coal-fired power stations were also difficult to anticipate. Several units at major coal plants, including at AGL Energy’s Bayswater and Origin Energy’s Eraring power station, contributed to last week’s strains.
Wholesale power prices also tend to soar during peak demand periods, adding to retail utility bills unless countered by federal and state government rebates.
