But this week’s update on the investment outlook reflected “positive momentum”, AEMO said, as long as all expected projects were delivered “on time and in full”.
Loading
If the rollout proceeds at this pace, it will provide a critical boost to Australia’s ability to replace retiring coal plants while catering for greater electricity demand in the future, such as from power-hungry data centres, electric cars and households switching from gas to electric appliances, AEMO said.
The risk of “reliability gaps” emerging in NSW in 2027-28 following the planned closure of Eraring coal-fired power plant were “no longer forecast”, the report said.
Similar gaps in Victoria in 2028-29, when the Yallourn generator is due to close, had also been removed.
However, AEMO notes that the removal of the two baseload coal-fired generators may make it more challenging to maintain the security and stability of the grid.
The market operator is also forecasting a small reliability risk in Queensland this summer due to project delays, the reduced availability of power generation units and expected periods of elevated demand.
In South Australia, AEMO warns of another reliability gap in 2026-27 due to delays in building the 900-kilometre transmission link known as Project EnergyConnect linking NSW to South Australia, and the scheduled closure of AGL’s Torrens Island B gas-fired power station.
However, AEMO noted it had not factored in AGL’s recent in-principle agreement with the state government to extend the life of the gas plant another two years.
“Should such an extension become formalised, no reliability gap would be forecast in these years,” AEMO said.
In its climate plan released last week, AGL said the talks were ongoing ahead of a September 30 deadline to strike a binding deal. “While the discussions have not yet resulted in a legally binding agreement, AGL has agreed in principle to the request and continues to engage constructively with the South Australian government,” the company said.
Federal Climate and Energy Minister Chris Bowen said the market operator’s latest assessment reminded Australians that ageing, unreliable coal plants posed a risk to the energy system, and the government’s plan to spur greater investment in renewables was working.
“We are making the system cleaner, fairer and more reliable while ensuring we replace retiring coal with the firmed renewables of the future,” Bowen said.
“The Coalition should heed this warning – ripping up targets and derailing the transition will cost Australian bill-payers and hurt reliability.”
