AEMO: No fear of blackouts despite coal plant closures

AEMO has released its latest Statement of Opportunities assessing the need for new electricity supply. It shows we're at little risk of the lights going out in spite of the carbon tax and recent coal power plant closures. But we'll need a lot more wind to meet the Renewable Energy Target.

The Australian Energy Market Operator has released its 2012 annual Electricity Statement of Opportunities (ESOO) publication, reviewing the future eastern states’ electricity market demand-supply balance. This takes into account the expected effects of the carbon price, but not the coal power plant contracts for closure process.

As had already been foreshadowed in prior AEMO publications profiled by Climate Spectator, there has been a huge revision downwards in expected annual energy consumption and also peak demand.

The table below illustrates that AEMO have substantially deferred and reduced the amount of new power generating capacity that will be required to keep the lights on, versus its 2011 forecast. So Queensland, which has traditionally been the boom state for electricity demand growth, will not need further capacity beyond that already committed until 2020-21, and the shortfall is only 79MW. Whereas in the 2011 Statement of Opportunities, the expectation was a shortfall of 341MW as early as 2013-14.  

Forecast of date and level of power supply deficit – 2012 vs 2011 AEMO forecast

What is particularly interesting is that in spite of some hysterical claims about the lights going out due to the closure of Playford and part closure of Northern coal fired generators this year, SA’s supply deficit has been pushed out to 2019-20 and is a measly 24 megawatts. 

Also the Statement of Opportunities provides a break down on the pipeline of new power generation projects summarised by fuel in the chart below.

Current commitment status of public generation developments in the NEM

The large size of the wind power project pipeline illustrates that there’s no fear of lack of supply for achieving the Renewable Energy Target in the next few years, although a large proportion of these projects still have some significant hurdles to overcome. 

What is concerning is that while NSW has no need for new capacity and its existing coal-fired generators are operating well below full capacity, the NSW government has ploughed on with a 60MW expansion to the Eraring coal-fired generator this year, and has committed to a further 60MW upgrade.

It is also concerning that the NSW government is still to withdraw a proposal for a new 2000MW power station at the site of the Bayswater coal power station. Yet the existing Bayswater power station is operating at just 59 per cent of its capacity.

Only a state government could be behind such a financially reckless venture when carbon emissions carry a price. It illustrates that the sooner we privatise electricity generation the better.

This year’s Statement of Opportunities also provides some analysis on the need for new renewable energy generation to meet the Renewable Energy Target, and restates some of its analysis on the expected uptake and generation from solar PV.

In common with most other analyses, AEMO don’t foresee a shortfall between supply and demand for large-scale Renewable Energy Certificates (LGCs) until 2016. The table below outlines its estimate of the expected LGC shortfall and how much new wind power capacity would be required to meet that shortfall.

Forecast of annual LGC supply deficit and wind capacity to address shortfall