The Australian Energy Market Operator (AEMO) has forecasted a less severe winter than 2022, but warned that the dangers extreme weather events represent for energy generation are still present. 

AEMO prepared an industry briefing report, NEM Winter Readiness 2023, developed with industry, aiming to firm up energy security and mitigate risks across weather, demand, generation and network infrastructure.

AEMO CEO, Daniel Westerman, said the risks to the National Electricity Market (NEM) were lower for the upcoming winter compared to 2022, which led to AEMO’s first ever intervention in gas and electricity markets on the NEM in June last year.

“While the 2023 winter weather outlook looks less severe than 2022, with lower-than-average rainfall and warmer temperatures, the potential for extreme weather events and generation vulnerability are still there,” Mr Westerman said.

“Fuel supplies are estimated to be similar to last year, with improved coal stockpiles increasing the availability of generators that were operating at reduced capacity last year because of coal supply issues.

“East coast gas storage levels are also higher than historical levels. Victoria’s Iona Gas Storage facility hit a record level at the end of the March quarter, and the Dandenong storage facility is in a healthy position.”

AEMO said there are no major outages impacting gas production leading into winter. However, Longford production levels have reduced by 20 per cent from last winter, increasing the reliance on winter gas supply from Queensland.

“There are an additional 2,300MW of dispatchable generation available across the NEM this winter – that is generation we can call on that wasn’t available last year,” Mr Westerman said.

“Plus, we have another 2,200MW of new renewable generation and storage capacity we also expect to be available.”

This capacity will help offset generation plants that have retired, including the Liddell Power Station in New South Wales(1,260MW), or that are unavailable this winter, such as Callide C3 (466MW) and Callide C4 (420MW) in Queensland.

Several major generating units are taking planned outages during the winter, including at the Yallourn (Victoria) and Bayswater (New South Wales) coal-fired power stations.

AEMO has noted the potential for gas shortfalls during peak consumption and gas-powered generation of electricity pressures this winter.

To de-risk gas availability on the NEM, AEMO is undertaking reforms to address current and future risks. 

Prior to the upcoming winter, Mr Westerman said new disclosure obligations will be implemented for gas industry participants.

“These new obligations provide AEMO with additional functions to monitor, communicate and manage any emerging gas supply adequacy and reliability risks or threats on the east coast market.”

To mitigate potential supply issues during increased demand periods, such as an extreme cold snap, AEMO can engage with gas facility operators to ensure supply capacity is maximised.

“Other avenues available to AEMO include increasing gas supply from Queensland, using LNG storage, and coordinating a response with the NEM,” Mr Westerman explained.

Although no reserve shortfalls have been identified, AEMO is actively monitoring generation availability across all regions and is working closely with transmission network service providers and generators to manage maintenance and planned outages.

To read more, visit: NEM Winter Readiness 2023

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