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Blackout warnings as coal-fired power shuts down

National energy predictions

Source: AEMO

Millions of Australians face potential summer blackouts in coming years, as meeting energy demand becomes more difficult than predicted.

The Australian Energy Market Operator has already said the reliability of the country’s energy market will be at risk, with 62 per cent of Australia’s coal fleet expected to close before 2033.

In an updated report on Tuesday, AEMO painted an even gloomier picture.

Delays to battery projects mean energy reliability will become more risky in NSW as soon as this summer and until 2028. It said mothballed generators had increased reliability risks in Victoria until 2028 and delays to Project Energy Connect – the NSW-SA transmission line – meant South Australia’s energy reliability would be at risk in 2026.

This means in rare, extreme situations – such as high-demand summer days during coal-fired generator outages, when there is no wind – wholesale electricity prices could increase, and blackouts and power outages are also possible.

AEMO said the likelihood of such incidents being reduced could be managed by transmitting energy from other states or tapping into off-market reserves to match supply with demand.

But these were short-term solutions.

AEMO chief executive Daniel Westerman said the government must make urgent investments if Australia wanted to address reliability risks over the long-term.

“Australia’s energy transition is well underway,” he said.

“[But] project development and commissioning delays are impacting reliability throughout the horizon.”

Further investment in generation and transmission projects, and optimising consumer energy resources such as rooftop solar would help improve reliability.

To get reliability under control for most of the next decade, state and federal governments also could not afford to delay their announced energy programs.

Battery projects designed to replace NSW’s Eraring power station will take longer than expected to come online, increasing pressure on the state to extend the life of Australia’s largest coal-fired power station.

“There are issues in terms of supply and in terms of technical connections,” NSW Energy Minister Penny Sharpe told ABC radio on Tuesday.

Origin Energy has been in talks with the NSW government about keeping the power station open longer than its planned closure date in August 2025.

A review released last year warned of electricity shortfalls and price spikes if Eraring closed as scheduled. The state government is working on a safety-net solution to head off the threat of blackouts.

Federal Energy Minister Chris Bowen said AEMO’s primary forecasts did not factor in additional generation expected to boost the grid in coming years.

“The scenario in today’s report where some key government policies are included shows a dramatically improved outlook on reliability – and this boosted outlook isn’t even including the wider 32-gigawatt boost with our Capacity Investment Scheme,” he said.

“There are projects scheduled to commence operating and meet energy demand this summer. With AEMO procuring interim reserves, we can be confident of ongoing reliability across higher demand periods, even if anticipated projects are delayed.”

– with AAP

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