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A future that harnesses renewable energy is the most cost-efficient option for a modern National Energy Market (NEM). That’s the message from the Australian Energy Market Operator’s (AEMO) 2020 Integrated System Plan (ISP), released on Thursday.
“The ISP delivers $11 billion in net market benefits, with this saving passed on to consumers through cheaper power bills,” says Clean Energy Council Chief Executive, Kane Thornton.
“AEMO has delivered a clear roadmap for transmission development that will build investor confidence for new clean energy generation. We must convert this Plan into action so that we can unlock new renewables before our ageing coal power plants retire.
“This Plan ensures that system reliability and security needs are being met through the transition from a supply reliant on fossil fuels to one that is cleaner, reducing our carbon footprint, while also satisfying existing competition, affordability and emission policies.”
Significantly, and at a time when job creation has never been more critical to the Australian economy, the ISP provides a roadmap to deliver between 26 and 50 GW of new, large-scale renewable generation which will play a key role in creating jobs and strengthening the fabric of our rural and regional communities.
The 6 to 19 GW of new dispatchable resources that are required as part of the Plan should also attract an initial investment in pumped hydro or battery storage, which Clean Energy Council data recently revealed, already has the attention of investors.
Importantly, the ISP recognises that without adequate investment in transmission infrastructure, new renewable energy – that is, wind and solar power – will not enter into the energy mix as quickly as necessary. Strategically-placed interconnectors and renewable energy zones (REZ), coupled with energy storage, will be the most cost-effective way to add capacity and balance the whole NEM.
“The ISP identifies several priority transmission projects across the NEM. The great news is that the Central-West Orana REZ Transmission Link in New South Wales is now prioritised as an actionable ISP project,” says Thornton. “This was an initiative that was nine-times over-subscribed by investors, and rightly so. REZs are going to play a considerable role as part of the transition to clean energy.”
Thornton said that while there is much work to be done, with the release of the ISP, there is an overwhelming cause to be optimistic.
“The ISP suggests we are staring down the barrel of having portions of the day where nearly 90 per cent of Australia’s energy demand is being met by renewable generation.
“It also suggests that with the right transmission investment state-based Renewable Energy Targets can be met in all scenarios.”