AEMO CEO speech at Australian Clean Energy Summit 2023

7 min

Good morning,

I’d like to acknowledge that I’m on the lands of the Gadigal people of the Eora nation.

I’d like to acknowledge them as traditional owners and pay my respects to elders, past and present, and to all First Nations people with us today.

Thank you, Kane, for inviting me, and to the Clean Energy Council for all that you do.

And importantly – thanks to you, the investors, developers and operators, who are one of the driving forces behind Australia’s energy transition.

Your investments and operational assets, and the way you engage with customers, communities and society more broadly, are critical factors in the pace and success of the transition.

And that’s what I’d like to speak to you today about: Getting on with the transition.

At Australian Energy Week last month, I outlined three key tensions in the energy transition.

I did this from AEMO’s perspective as Australia’s energy system and market operator, and national system planner.

I proposed that the way we collectively manage those tensions will determine how usefully, how quickly and how harmoniously we can make the energy transition work for all Australians.

Today, I’d like to revisit these three tensions…and to share what we, at AEMO, are doing to progress them.

AEMO is one small cog in the big machine of this energy transition.

But hopefully, by sharing some of the tangible actions underway, I can highlight some progress, but reiterate the urgent need for investment and delivery, and for more to be done to ensure a smooth energy transition for Australian homes and businesses.

The tensions that I outlined were three-fold:

The first tension – between today and tomorrow – requires our industry to redesign and rebuild the aeroplane while we’re flying it. We need urgent and sustained investment in renewable energy, firming generation and transmission. And we have to keep the lights on and the gas flowing today, while we assemble the new system of tomorrow, as the system of yesterday gradually gives way.

The second – between the parts and the whole – is about integrating and operating the diverse range of technologies that a multi-gigawatt clean energy system needs, from the smallest to the largest, to create a reliable energy system at the least cost for consumers.

The third tension – between people and populations – is about addressing the concerns that are genuinely held in local communities who are being asked to host the infrastructure of Australia’s energy future, while they share the benefits with others in densely populated cities far, far away. It’s about the concessions we are asking individuals and small local communities to make for the greater good, and how we reconcile them.

And while we navigate the complexities of these tensions in the midst of a rapidly changing system and market dynamics, we might sometimes fail to see what’s right in front of us.

Today, because of the extensive and ongoing investment the energy transition requires, Australia is on the cusp of a vast, new economic opportunity, the likes of which we haven’t seen for decades.

Not since nation-building projects of decades past: the original Snowy Hydro scheme, the Iron Ore booms in the Pilbara, or the development of Australia’s traditional energy exports: coal & gas.

And in terms of daily utility – ranks as essential and indispensable as Australia’s system of freeways and city tunnels, network of mobile phone towers and roll out of broadband internet.

We need to progress this energy transition…

…to realise all the benefits that it will bring, and AEMO is working hard – and in collaboration with many others – to manage the tensions in this energy transition to help maximise the benefits for all Australians.

Let’s start with the tension between today and tomorrow.

As you know, all governments in Australia are aligned on net zero by 2050. And various jurisdictions have interim targets of varying ambition along the way. Federally, by 2030 it’s to reduce emissions by 43% and to have the grid fed by 82% renewables.

To navigate us through the energy transition from today to net-zero 2050 – while simultaneously keeping the lights on and the gas flowing – AEMO has a plan that looks ahead 30 years.

The Integrated System Plan.

While it has our logo on it, it’s a work of extensive collaboration – indeed co-design – between AEMO and hundreds of energy stakeholders.
It’s a least-cost, least-regret pathway that maximises benefits for energy consumers.

It’s clear that as Australia transitions rapidly away from our traditional dependency on coal generation, our energy future will be built on four pillars:

  • Low-cost renewable energy like solar, wind and hydro;
  • Firming capacity to smooth out the peaks and troughs, like batteries, pumped hydro, and flexible gas generation;
  • New transmission and modernised distribution networks to connect consumers to those new sources of energy; and
  • Power systems capable of running, at times, entirely on renewable energy.

The reason low-cost renewables, firming capacity and transmission are the ingredients is just that: they are the least-cost replacement for Australia’s ageing coal-fired generators.

This is confirmed again by the GenCost report we jointly released with CSIRO today.

And our operational insights confirm the effect of renewables on the National Electricity Market: more renewable output puts downward pressure on wholesale electricity prices, and reduces emissions.

Our Integrated System Plan is clear that investment is needed at scale.

Generation from wind and solar, energy storage systems and other firming capacity, and transmission, all need urgent investment to ensure the lights stay on as our coal-fired power stations retire.

As I’m sure you know, the east coast power system needs to triple the amount of grid scale solar and wind by 2030, and triple it again by 2050, from 16 GW today to 141 GW by 2050, while storage needs to expand by a factor to 30 from where it is today, to 60 GW.

That’s a big economic opportunity in anyone’s language, all in the best interests of energy consumers.

Australia’s power system should be one of the most investible in the world, and there is no shortage on capital markets for investment.

The critical thing is timing, to make sure the new generation and firming capacity comes in ahead of coal retirements, when our forecasts suggest two-thirds of coal, or 14 GW, could exit the market in six-and-a-half years’ time.

Policy makers across Australia recognise this, and have a range of mechanisms to bring on investment. To be a catalyst the transition needs.
The Commonwealth’s Capacity Investment Scheme is a clear example, aiming to incentivise additional clean and dispatchable generation, initially in NSW, Victoria and South Australia with other jurisdictions to follow.

I’m pleased that AEMO will play a key role in the scheme’s implementation, as we do in other jurisdictions.

For example, in NSW, AEMO Services, our independent subsidiary, is running the competitive tendering process to procure the investments identified in the Electricity Infrastructure Roadmap.

Already in first Roadmap tender process, AEMO Services has procured 1.4 GW of solar and wind generation and Australia’s first 8-hour battery.

This represents more than 2.5 billion dollars of investment in NSW’s renewable energy infrastructure, and enough power for 700,000 homes.

Now, the current tender for firming generation in NSW will be bolstered by the Commonwealth scheme, up to an indicative size of 930 MW.
I know that the Commonwealth intends to release a broader consultation document in the coming weeks, and I’m optimistic that this mechanism will accelerate the type of investment that Australia urgently needs.

That brings me to the second main tension we’re managing in the energy transition, between the parts and the whole.

The pace and urgency of the transition means connecting the new technologies to the grid as quickly and efficiently as possible.

AEMO has focused its connections efforts on engaging early and proactively with project developers, equipment manufacturers and network service providers to agree critical project issues, and the allocation of responsibilities across all parties to resolve these.

I know how important a clear and smooth connections process is.

From FY22 to FY23, we’ve seen a 10% improvement in average processing time across the application and registration processes, and a 20% time improvement for commissioning.

Collectively, this means a 3-month decrease in the end-to-end processing time for connections.

I know there’s more to these timeframes than just the AEMO process, but I do believe these are examples of how focus, collaboration and a genuine commitment from all parties can achieve positive results.

And when we look at the grid connections processes around the world, the feedback I get is that Australia is leading the way.

But we also recognise stakeholders’ feedback that the technical registration phase is still a concern, and we continue to actively support efforts to improve it.

AEMO is committed to building a connection process that is transparent, consistent, timely and cost effective.

As we incorporate more renewable energy, we will encounter more periods of high renewable generation to manage.

As you know, that brings certain operational challenges.

When renewables flood the power system, they can push out synchronous generation and the steady electrical heartbeat that we’ve relied on for so long.

We’re a fair way down the road in understanding what a power system running on high levels of inverter-based resources requires to operate reliably.

This is truly world-leading work, where we are collaborating with system operators and research institutions around the globe.

We’ve just released our latest instalment of the Engineering Roadmap to 100% Renewables, the Priority Actions report.

It highlights the achievements made in the past 12 months, and points to the priority actions we see for the year ahead.

Readiness to operate the power system with 100% renewable energy is a critical enabler in the transition to a net-zero energy system.

Another critical enabler is AEMO’s provision of rigorous information, and among other important reports, we will soon release our electricity statements of opportunity for east and west-coast grids.

As a reminder, these reports are designed to highlight the minimum investments needed to maintain reliability against the current standard.

The team are currently finalising our analysis, but I’m sure these reports will continue to highlight the urgent need for more generation in all mainland regions.

We’re also finalising the Input and Assumptions report for the 2024 Integrated System Plan, to ensure the changes in technology, costs and market developments are properly captured and factored into future scenarios and plans.

And that brings me to how we’re managing the third tension, between people and populations.

The existing transmission network was laid out 70 years ago to connect the big, powerful coal generators mainly in the Latrobe and Hunter valleys to the cities.

But the new solar and wind farms which are our cheapest form of new build energy, are located in the places where the sun shines brightest, and the wind blows most consistently.

New transmission is needed to transport these cheap, clean electrons in sufficient volume to our towns and cities.

We know there are several challenges here, including constraints in supply chains and local workforces, but a key challenge is social licence.
And we know we have a lot of work ahead of us to continue to build trust in communities, as an industry and as AEMO.

In Victoria, AEMO is responsible for state-wide transmission planning so we are getting first-hand experience of what it takes to develop transmission projects.

Two essential links are being developed, the Western Renewables Link and VNI West.

AEMO is continuing to step up its engagement with communities in the area of planned transmission projects to answer questions and try to allay local concerns about the projects.

We have formed a company, Transmission Company Victoria, to work with landholders, Traditional Owners, and the community to better understand local concerns as VNI-West moves towards construction.

Acknowledging that AEMO will not be the ultimate owner of this infrastructure, TCV will provide the continuity for the community as we work through the early stages of development for this important transmission line. It will ensure the communities’ concerns are recorded, considered and preserved as the project progresses.

Many communities across Australia have happily coexisted with electricity transmission for decades, but communities who have not experienced transmission have a range of legitimate questions and concerns.

To address these, we’ve been taking advice from a panel of experienced farming, Traditional Owner, consumer and regional voices, so that we understand how we can best engage and address the concerns that local communities genuinely hold.

We’re collaborating with other transmission companies on best practices, and have published information guides for landholders, including about fire safety and how farming and transmission lines can coexist.

We are highlighting compensation schemes to fairly recognise landholders’ interests in places where new transmission is planned.

We are meeting face to face with regional communities in town halls and with drop-in information sessions to hear their concerns first hand, and to answer questions they may have.

Local communities have been generous with us, sharing their local insights about aspects of local terrain, land uses and biodiversity.

The point is, building social licence with communities is not an academic exercise or popularity contest.

Rather, it is a real world, steady and ongoing dialogue with communities to build understanding, and trust, through demonstrating sound processes and listening and responding.

After all, we all stand to benefit from this energy transition.


Because the transition will maximise the flow of the least cost, low-carbon electrons into the power system…which will keep downward pressure on wholesale energy prices…and keep the lights on…and help reduce emissions, as coal-fired generators retire.

The projects to deliver the energy transition will provide thousands of jobs in a multitude of disciplines…

…whether construction workers, engineers, the local shopkeepers to support those new workforces, administrators, accountants and lawyers, or specialist suppliers.

These projects will provide people with skills and education, careers, professions, stable incomes and security for years and years.

The cities will benefit. The regions will benefit. The economy will benefit. And that helps everyone.

And for AEMO’s part, we won’t be taking our eyes off our fundamental role of operating today’s energy system and markets while we enable the transition.

And for the first time, in the coming months we’ll be running an open presentation for our members, to share our performance over the past financial year, and priorities for the year ahead. We’re doing this continue to improve transparency for members and stakeholders.

Like all of us in the sector, AEMO has a lot on our plate to navigate these tensions to make this energy transition work best for all Australians.

We’re operating the systems and markets of today, while preparing the plans and roadmaps for the energy system of tomorrow.

We’re highlighting the need for urgent investment in the parts, and helping to integrate those into the least-cost whole energy system that meets the needs of Australian homes and businesses.

And we are working hard to build trust with communities so that both people and populations can share in the benefit of the transition.

This is a once-in-a-generation opportunity, let’s make the best of it.

Thank you.


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