AEMO outlines plan to operate the power system with very high levels of renewables

3 min

The Australian Energy Market Operator (AEMO) today released the Renewable Integration Study (RIS), the first stage of a multi-year plan to maintain system security in a future National Electricity Market (NEM) with a high share of renewable resources.

The RIS evaluates the technical challenges associated with reliance on high levels of renewable energy resources and the actions that must be taken. The study focuses on the time period up to 2025 when AEMO forecasts that at times, as much as 75 per cent of energy could be provided by wind and solar resources.

AEMO’s Managing Director and CEO, Audrey Zibelman, said that the Renewable Integration Study sets out an action plan that supports the secure transition of the NEM power system.

“The Renewable Integration Study makes it clear that today’s operating approaches and market frameworks are becoming less effective as the NEM continues its transformation to world-leading levels of renewable generation”, Ms Zibelman said.

 “Australia already has the technical capability to safely operate a power system where three quarters of our energy at times comes from wind and solar energy generation.

“However, to do so requires changes in our markets and regulatory requirements, otherwise, AEMO will be required to limit the contribution of these wind and solar resources to 50 or 60 per cent of electricity supply at any point in time, even though they are the lowest cost way of providing electricity,” she said.

Based on the learnings contained in the RIS, AEMO recommends the following actions are prioritised, agreed and implemented well ahead of 2025:

·        Continue the design and deployment of the Energy Security Board’s (ESB) Market 2025 reform program with particular focus on ahead and system security services markets

·        New standards and settings to maximise the potential contribution of distributed solar PV

·        Construction of required transmission resources identified in the Integrated System Plan (ISP)

In total, the NEM has 17 gigawatts (GW) of wind and solar generation capacity, with several regions among the world’s highest levels of wind and solar, including one of the highest levels of residential solar photovoltaics (PV).  By 2025, AEMO’s Draft 2020 ISP forecasts in its ‘central’ scenario that this can increase to 27 GW of wind and solar, including both utility and distributed solar PV. This scenario does not yet take the effects of COVID-19 into account.

“Given the pace and complexity of change in the NEM, the study highlights the need for flexible market and regulatory frameworks that can adapt swiftly and effectively as our understanding of the changing power system evolves. This is going to be particularly important in the areas of technical standards and frameworks for sourcing essential system services,” she said.

The report highlights key areas of challenges and actions: secure system operation; system impacts of high distributed solar PV; managing both frequency and system strength with reducing synchronous generation online; and managing increasing variability and uncertainty in energy supply.

In recommending actions and highlighting positive potential outcomes, AEMO does not underestimate the extent of work that will be required to successfully adapt the NEM.

“The findings of this report have far-reaching implications for the energy sector in Australia now and in the coming years,” she said. “AEMO looks forward to working closely with stakeholders to explore the findings and actions arising from this report and develop an integrated program of priority focus areas to support the energy transition.”

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