The Australian Energy Market Operator (AEMO) has released an update to the 2022 Electricity Statement of Opportunities (ESOO) report, confirming the urgent need for investment in generation, long-duration storage and transmission to achieve reliability requirements over the next decade.
The reliability update is due to material generation capacity changes since the 2022 ESOO, with insights used from developer and market participant surveys, along with AEMO’s Generation Information and Transmission Augmentation Information files.
AEMO CEO Daniel Westerman said that the update reiterates the critical need for timely investment in generation, long duration storage and transmission to fill forecast reliability gaps as Australia moves rapidly away from its traditional dependency on coal generation.
“Since publishing the 2022 ESOO, short-term forecast reliability gaps in South Australia (2023-24) and Victoria (2024-25) have been filled by new gas, wind and battery developments, along with a delay to the retirement of an existing gas generator,” Mr Westerman said.
“Reliability gaps begin to emerge against the Interim Reliability Measure from 2025 onwards. These gaps widen until all mainland states in the NEM are forecast to breach the reliability standard from 2027 onwards, with at least five coal power stations totalling approximately 13 per cent of the NEM’s total capacity expected to retire.
“Urgent and ongoing investment in renewable energy, long-duration storage and transmission is needed to reliably meet demand from Australian homes and businesses,” he said.
Since the 2022 ESOO (August 2022), 1,326 megawatts (MW) of wind and 461 MW (604 MWh) of battery storage projects across the NEM have met AEMO’s commitment criteria.
Strengthening near-term reliability forecasts is the delayed closure of the Osborne Power Station (SA), the newly committed Bolivar Power Station (SA), and Waratah Super Battery (NSW) with associated transmission upgrades and system integrity and protection scheme (SIPS).
The SIPS provides a virtual transmission solution that unlocks capacity in the existing transmission system, allowing electricity consumers in the Sydney, Newcastle and Wollongong demand centres to access more energy from existing generators.
“The NEM has a strong pipeline of proposed generation and storage projects, totalling three times today’s generation capacity, with large-scale solar, wind and batteries accounting for 86 per cent,” Mr Westerman said.
“Investment in firming generation, such as pumped hydro, gas and long-duration batteries, is critical to complement our growing fleet of weather-dependent renewable generation to meet electricity demand without coal generation,” he said.
The update also highlights the risk of events when electricity demand may exceed supply. These events may be driven by weather uncertainty or other circumstances, such as generator or transmission outages that may erode available supply when it is required.
AEMO will continue to work with governments, market bodies, industry and community to manage risks and potential solutions as the power system transitions from coal to firmed renewables, supported by efficient investment in the transmission system.
 Liddell (April 2023), Eraring (August 2025), Callide B (2028), Yallourn (2028), Vales Point B (2029)
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Notes to the editor
The ESOO reliability assessment is measured in expected unserved energy (USE) as a percentage of energy demand. USE can alternatively be described as involuntary load shedding (loss of customer supply). The forecasts are assessed against the reliability standard of 0.002% USE and the Interim Reliability Measure (IRM) of 0.0006% USE.
The forecast considers only existing generation, and those generation developments that are sufficiently advanced to be considered committed. By considering only well-progressed projects, the reliability forecast provides insight on the additional developments required to deliver reliability consistent with the relevant reliability standards.
AEMO is responsible for operating Australia’s largest gas and electricity markets and power systems in the best interests of Australian energy consumers. These include the National Electricity Market and interconnected power system in Australia’s eastern and south-eastern seaboard, the Wholesale Electricity Market and power system in Western Australia, the Victorian gas transmission system and gas markets across Australia.
As Australia’s independent energy markets and power systems operator, AEMO provides critical planning, forecasting and power systems security advice and services to deliver energy security for all Australians. AEMO is a not-for profit entity. For more information, head to www.aemo.com.au.