Reliability challenges facing the National Electricity Market

Media release

22 August 2019

The Australian Energy Market Operator’s (AEMO) Electricity Statement of Opportunities (ESOO) report is another reminder of the reliability challenges facing the National Electricity Market (NEM). 

This challenge is starkest in Victoria, with AEMO warning the state is not expected to meet the NEM’s reliability standard this summer, putting Victorian households and businesses at an unacceptable risk of blackouts.

Without the procurement of up to 560 MW of emergency reserves by AEMO, up to 1.3 million Victorian households could face being without power for up to four hours this summer. 

When Victorians flick the switch, they need to be confident the lights will turn on - and stay on.

The Andrews Labor Government has failed to properly replace ageing infrastructure which has created unnecessary risk to the affordability and reliability of the NEM.

The ESOO report is clear:

'Most of the announced new generation projects are variable renewable energy generators, which often do not generate at full capacity during peak demand times or may be positioned in a congested part of the network. As a result, while providing significant additional energy during many hours of the year, these projects are forecast to only make a limited contribution to meeting demand during peak hours.'

AEMO also warns of the risk to consumers following the closure of the Liddell Power Station.

Our Government, along with the NSW Government, has established the Liddell Taskforce to assess the impacts of Liddell’s announced closure on prices and supply in the region.

The Taskforce will work closely with stakeholders to investigate the extent of these impacts and options for addressing them.

While AGL’s decision to extend the life of the Liddell Power Station until at least April 2023 will alleviate supply risks in the short term, more generation and transmission investment is needed to keep the lights on longer term.

AEMO’s warning confirms why the Government remains focussed on the key challenge of ensuring enough reliable and affordable generation remains in the electricity system.

The Government is taking strong action to deliver the reliable, 24/7 affordable power that Australian families and businesses deserve.

  • We have established the Liddell Taskforce to consider options to deal with AGL’s announced closure of the plant.
  • We have delivered the Retailer Reliability Obligation to ensure enough available dispatchable generation to keep the lights on.
  • We have committed to Snowy 2.0, which will deliver an additional 2000 MW of dispatchable storage into the NEM; and
  • Through the Underwriting New Generation Investment program, we will deliver new, reliable generation into the market, putting downward pressure on prices and ensuring the security of the grid.
Minister for Energy and Emissions Reduction