The just released blueprint to prepare Australia’s National Electricity Market (NEM) for the future envisages a long-term national emissions reduction trajectory and a clean energy target.
Australia’s Chief Scientist Alan Finkel today presented the “Independent Review into the Future Security of the National Electricity Market”, which took about eight months to complete. The measures proposed in the blueprint aim to ensure the electricity system’s future reliability, increased security, and lower emissions. It also seeks to reward consumers for choosing distributed energy solutions like solar panels and batteries, energy efficiency upgrades, and other improvements that would boost the reliability and security of the electricity system.
Finkel’s review presents three pillars to achieve security, reliability and lower emissions. The emissions reduction trajectory and clean energy target are part of the first one -- the orderly transition package. As part of it existing large electricity generators will be required to give a three years’ notice of closure. Also, the review panel recommends establishing a Generator Reliability Obligation for new generators such as wind and solar.
The second pillar, system planning, recommends a system-wide grid plan to inform network investment decisions and ensure security is preserved in each region. This would also include a list of potential priority projects to enable development of renewable energy zones.
The third pillar of stronger governance proposes the establishment of a new Energy Security Board to drive implementation of the blueprint and carry out annual health checks on the state of the electricity system.
“Enduring energy policy combined with sensible market reform can ensure the current AUD 7.5 billion boom in new solar and wind projects continues long into the future in order to keep the lights on and unlock the massive investment and jobs opportunity for Australia,” Clean Energy Council CEO Kane Thornton commented.
THE FUTURE GRID
“Our electricity system is entering an era where it must deal with changing priorities and evolving technologies. If the world around us is changing, we have to change with it. More of the same is not an option, we need to aim higher,” Finkel says.
It is not possible to predict exactly what the NEM would look like in the future, but the report lists several key features it could have, based on current technology trends and investments. These include increased investment in large, medium and small-scale variable renewable electricity (VRE) generation capacity and microgrids, and also in large-scale dispatchable generation and energy storage, mainly gas-fired generation, batteries and pumped hydro. These will support the higher levels of renewable energy penetration.
Coal-fired power use will be declining as the coal fleet is approaching the end of its design life and investors are not interested in new projects. This will help reduce emissions in the sector.
Demand for power is seen to decline with the increase in distributed generation, such as rooftop solar, and in energy efficiency. The resulting decrease will be in part compensated for by the greater demand for electricity in transport and space heating.
The report sees big data and the internet-of-things (IoT) driving innovation and supporting new business opportunities that transform residential, commercial and industrial energy use. The role for networks will be crucial, such as between resource-rich areas with solar, wind or pumped hydro capacity, and load centres, and between NEM regions.
The full review is available here. It was initiated after a major blackout in South Australia last year, with the Council of Australian Governments (COAG) Energy Council agreeing at the time that state governments need a “coordinated, national reform blueprint” for the energy system.
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