The Australian Energy Market Operator’s (AEMO) latest analysis finds that immediate targeted actions, close collaboration and long-term planning is required to mitigate the heightened risk of unserved energy (USE) over the next decade in the National Electricity Market (NEM).

Consistent with previous findings, AEMO’s 2018 Electricity Statement of Opportunities (ESOO) continues to highlight the need for both short term and longer term strategic planning and resource investment necessary to manage the power system during peak summer periods.

AEMO has commenced work to prepare the power system for the summer ahead. This includes procuring off-market reserves, and closely collaborating with industry and government to maximise available resources and resilience of energy infrastructure. The 2018 ESOO projects that without these actions, there would be a risk of involuntary load shedding during summer peak periods in Victoria from this summer, in New South Wales from 2023-24 and in South Australia from 2024-25. 

The 2018 ESOO takes into account refinements in forecasting by incorporating analysis from real-time operations, the latest weather forecasts from the Bureau of Meteorology, and stakeholder feedback. The projected risk is driven partly by the reduced reliability of ageing generators observed in recent years.

“AEMO has commenced work to prepare the power system for the summer ahead, which includes ensuring we have the resources available to manage any range of potential scenarios, such as an extreme heatwave, bushfires, storms, and/or mechanical failures. Close collaboration with industry in the lead up and throughout summer will be key to reducing the risks of energy supply shortfalls,” said Audrey Zibelman, AEMO’s Managing Director and Chief Executive Officer. 

“As with last year, we have a clear plan in place and will take all the appropriate actions to ensure the industry is ready to meet the demands of the upcoming summer.

“Our most recent summer illustrated that considered planning and collaboration across governments and industry was crucial to ensuring the power system had the required resources to meet extreme peaks in demand,” said Ms Zibelman.  

The findings of this ESOO continue to reinforce the need for a strategic and coordinated approach to ensure ongoing reliability and stability of the power system, such as contemplated by the reliability mechanism of the National Energy Guarantee, for the benefit of energy consumers.

Beyond the immediate summer, AEMO’s focus is on its goal of delivering affordable and secure energy for all Australians, and it will continue to work closely with its wide range of stakeholders to deliver the best outcome for consumers, now and into the future.  

For more information: AEMO Media, Mobile: 0409 382 121,  Email: media@aemo.com.au 

About AEMO

AEMO is responsible for operating Australia’s largest gas and electricity markets and power systems, including the National Electricity Market and interconnected power system in Australia’s eastern and south-eastern seaboard, and the Wholesale Electricity Market and power system in Western Australia.

AEMO also operates the Victorian Declared Wholesale Gas Market and the Victorian gas transmission system; the wholesale gas Short Term Trading Market hubs in Adelaide, Sydney and Brisbane; the Wallumbilla Gas Supply Hub in Queensland; and the Moomba Gas Supply Hub in South 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. For more information, head to www.aemo.com.au

As Managing Director and CEO, Ms Zibelman also serves on the Energy Security Board.

About the Reliability Standard

The reliability standard is a planning standard that was designed to deliver an economically efficient outcome for the market (in other words, where the cost of additional capacity was equivalent to the avoided cost of load shedding). It is a measure of the effectiveness, or sufficiency, of installed capacity to meet demand. It is defined in clause 3.9.3C of the National Electricity Rules as the maximum expected unserved energy (USE), as a percentage of total energy, in a region over a financial year, and is currently set at 0.002%. It has an implicit acceptance of load shedding (for example, the 0.002% standard allows up to 1,320 megawatt hours (MWh) of load shedding in NSW over the course of the 2017 calendar year).

About AEMO Energy Live

Launched in December 2017, AEMO Energy Live is our digital news and information hub dedicated to all things energy. AEMO Energy Live features commentary, analysis, interviews, news and views delivered via videos, podcasts, full-length feature articles, infographics and easy to understand explainers.