Heatwaves should lift electricity demand to decade-highs this summer, but regulators are confident extra renewable generation capacity will reduce the risk of blackouts.
The summer readiness report by the Australian Energy Market Operator, released on Wednesday, estimated the grid serving eastern states will have 1,500 megawatts more scheduled generation capacity available than a year ago, even with the closure in April of the remaining units of the Liddell coal-fired power station in New South Wales.
New wind and solar farms will also provide about 2000MW more generation capacity than was available during the 2022-23 summer.
“This year’s summer forecast is for hot and dry El Niño conditions, increasing the risk of bushfires and extreme heat, which could see electricity demand reach a 1-in-10-year high across the eastern states and in Western Australia,” Aemo’s executive general manager for operations, Michael Gatt, said.
“The increase in generation availability and additional reserves being procured will help navigate reliability pressures, should they eventuate,” Gatt said.
Climate systems to Australia’s west and east have been setting the country up for a hotter and drier-than-average summer. The August-October period was already the driest three-month period in records going back to 1900, the Bureau of Meteorology said last week.
El Niño weather patterns typically don’t start to reduce rainfall and contribute to hotter temperatures in eastern Australia until late spring. The bureau is predicting warmer-than-average summer daytime temperatures for almost the entire continent, elevating bushfire risks after three relatively wet and mild summers.
Households, too, have been adding to generation capacity. For the first nine months of 2023, they added about 2256MW of new rooftop solar power according to Green Energy Markets. At that pace, they will add about 750MW more by the year’s end.
The federal energy minister, Chris Bowen, said “across governments, Aemo and the energy sector, we are working to ensure we are as best prepared as we can be for summer”.
“Last financial year, Aemo issued connections approvals for 6.8 gigawatts of new generation up from 4.2GW in the previous financial year,” Bowen said.
The Aemo forecasts Victoria and South Australia to be at the greatest risk of electricity supplies falling short of the grid’s interim reliability measure.
Still, the “risk of load shedding remains in all regions where high demand days combine with low variable renewable energy availability and or scheduled generation and network outages”, the report said.
Those two states had more so-called high-impact outages planned for this summer than last year, unlike NSW and Queensland.
NSW lost the remaining 1,260MW capacity of its Liddell plant in the Hunter Valley. The 1,400MW-plus Mt Piper plant near Lithgow, west of Sydney, was also being monitored for possible “supply restrictions” due to dewatering challenges at a nearby coalmine.
“For now, with the current deliveries we are receiving from Springvale, Clarence and Airly along with our existing coal stockpile, we are reasonably well-placed to meet system needs through spring and summer, particularly given the warmer spring weather and our ability to operate Mt Piper flexibly on low loads,” a spokesperson for EnergyAustralia said.
Aemo has also been beefing up its Reliability and Emergency Reserve Trader network – a group of big users of energy prepared to reduce their consumption at short notice to ease grid strains.
It aims to supply 118MW of reserves in South Australia and 120MW in Victoria.
The Rert system was only triggered once last summer, paying more than $50,000 a MW hour, or about $1.42m in total, to companies that powered down.
