The Australian Energy Market Operator (AEMO) has unveiled its 2023 Electricity Statement of Opportunities (ESOO) report. 

The 10-year forecast casts a spotlight on the development needs across Australia's National Electricity Market (NEM) states.

Derived from a wealth of sources, including developer and market participant surveys, transmission data, and analysis of potential energy constraints such as droughts and supply shortages, the ESOO report is a blueprint for the nation's energy landscape.

“This year’s report highlights the pace of Australia’s energy transition and the urgency needed to deliver new investment to ensure reliable, affordable and cleaner energy for consumers,” said AEMO's CEO, Daniel Westerman.

“Over the 10-year outlook, we continue to forecast reliability gaps, which are mostly due to the expectation that 62 per cent of today’s coal fleet will retire by 2033.

“To ensure Australian consumers continue to have access to reliable electricity supplies, it's critical that planned investments in transmission, generation and storage projects are urgently delivered.”

Over the next decade, an increase in electricity consumption and peak demand is anticipated due to population growth, economic activity, and electrification across various sectors, including transportation and residential heating and cooking.

Based on the ESOO's 'central scenario,' which considers existing, committed, and anticipated projects, reliability risks are predicted to exceed standards in Victoria starting this summer, in New South Wales from 2025-26, South Australia this summer, and again from 2028-29, and in Queensland from 2029-30. 

These gaps signal the need for electricity retailers to secure sufficient capacity to maintain a reliable power system.

Westerman says government initiatives and mechanisms, such as transmission projects in the Integrated System Plan and the Commonwealth's Capacity Investment Scheme, in addressing the identified risks over the next decade. 

Moreover, the active participation of consumers through rooftop solar, batteries, and electric vehicles offers additional potential to reduce reliability risks.

This summer presents a unique challenge, as approximately 3.4 GW of new generation and storage capacity is expected to come online. 

“We’re expecting an elevated level of risk compared to recent years, mostly due to hotter and drier conditions, and coal-fired generation reliability is at historic lows,” Westerman said.

“The entire industry is focused on managing the risks in the summer ahead, particularly during high-demand periods coupled with generation outages and low renewable output, but some risk will remain.

“In the longer term, AEMO will continue to collaborate with industry and governments to deliver energy projects to maintain reliable and affordable electricity for all consumers,” he said.
Federal Energy Minister Chris Bowen claims the government is working to ensure the power grid is as “stable as it can be”.

The full report is accessible here.