The Australian Energy Market Operator (AEMO) has published a draft of the 2024 Integrated System Plan (ISP), a roadmap set to guide the energy transition which includes the lowest cost pathway to net zero.
In the past 18 months, AEMO has collaborated with more than 1,300 stakeholders, produced 60 presentations and reports, and considered more than 110 submissions from industry, consumer and community representatives and governments to produce the latest plan for the National Electricity Market (NEM).
AEMO CEO, Daniel Westerman, said that the plan highlights the urgency for investment to ensure that Australians can continue to have access to safe, reliable and affordable energy.
“AEMO has worked closely with industry, governments and consumer representatives to develop this plan in the interests of energy consumers,” Mr Westerman said.
“The plan maps out urgent investment so that homes and businesses continue to access reliable and affordable electricity, both in the coming decade when 90 per cent of coal generation is expected to retire, and beyond to 2050.
“As with previous reports, this plan shows that the lowest-cost pathway for secure and reliable electricity is from renewable energy, connected by transmission, supported by batteries and pumped hydro, and backed up by gas-powered generation.”
AEMO said that it has taken a wide range of considerations into account in developing the Draft 2024 ISP. This includes government energy policies and net zero commitments, costs of electricity infrastructure, future trends in electricity consumption, consumer and grid-scale generation and storage, transmission upgrade options, and power system reliability and security needs.
The future trends are based on the ‘step change’ scenario, assessed as the most likely scenario for planning activities by AEMO based on input from a range of industry experts, government and network service provider representatives, generators and retailers, researchers, academics, and consumer advocates.
“To identify the optimal development path to 2050, we used Australia’s most comprehensive set of power system and market models to assess the benefits and risks of more than 1,000 potential pathways,” Mr Westerman said.
“Delivering the transmission projects identified in this plan is expected to avoid $17 billion in additional costs to consumers if those projects were not delivered.”
To deliver this lowest cost pathway for secure and reliable energy, this plan calls for investment that would:
- Add close to 10,000km of new and upgraded transmission by 2050, as highlighted in previous plans, with around a quarter underway and half to be delivered in the next decade
- Triple grid-scale variable renewable generation by 2030 (57GW) and increase it seven-fold by 2050 (126GW)
- Add almost four times the firming capacity from dispatchable storage, hydro and gas-powered generation by 2050 (74GW)
- Support a four-fold increase in rooftop solar capacity by 2050 (72GW), capable of providing additional benefits to consumers if coordinated and responsive to market and operational signals
“Our updated analysis shows that Australia’s coal power stations are likely to close earlier than planned, and Australians are electrifying their homes and businesses at a faster rate.
“In the next decade, this plan shows the need for 5,000km of transmission, both new projects and those underway, triple renewable generation and double dispatchable storage, hydro and gas-powered generation.”
This grid-scale investment also considers growth and value from rooftop solar, batteries and electric vehicles in supporting energy reliability and the secure operation of the power system.
“While progress is being made, the transition is urgent and faces significant risks if market and policy settings, social licence and supply chain issues are not addressed.”
With the release of the Draft 2024 ISP, the AEMO has invited all stakeholders to participate in the upcoming consultations, including public forums, and provide written submissions before 16 February 2024, after which AEMO will finalise the 2024 ISP by 28 June 2024.