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Dec 10 2021

AEMO’s future plan welcomed

The Australian Energy Council has commended the market operator for delivering a clear-eyed assessment of how to best manage the “once-in-a-century transformation” underway in the electricity system with the release of its Integrated System Plan (ISP).

The AEC, which represents 20 major energy businesses including Australia’s biggest investors in renewable energy, says the ISP outlines the measures needed to transition the National Electricity Market to lower emissions while keeping costs down for consumers and ensuring reliability.

The AEC’s Chief Executive Sarah McNamara said “AEMO’s scenarios show the profound disruption occurring in our grid as it transitions to a lower emissions profile.

“The ISP particularly highlights the rapid decline of coal in our market. To adjust for this change we must ensure there is sufficient dispatchable and sustainable resources in place that can operate for extended periods,” said Ms McNamara.

“AEMO’s scenarios also confirm the tremendous contribution the electricity sector is making towards reducing Australia’s emissions.

“The electricity sector will continue to deliver rapid cuts in its own emissions and will assist other sectors to do the same through increased electrification. In that respect, its pleasing to note that three of AEMO’s four scenarios show electricity playing a large part in decarbonising the rest of the economy. Unfortunately, this almost all occurs after 2030. The AEC considers it could start this decade.

"Electrification is an immediate and obvious way to decarbonise, and the technology is readily and economically available; such as heat pumps and electric vehicles. We just need policies, initiatives, and the will to see it happen,” said Ms McNamara.

AEMO’s use of an “optimal development plan” committing only limited resources to early preparation for major transmission developments is prudent. Recent major transmission developments have suffered major blowouts in cost and timeframe.

“It is critical that each development be subject to detailed cost-benefit analysis before committing customer funds.

“The market operator has acknowledged the importance of providing investment confidence given the scale of change still required.

“Consistency of approach is essential and we encourage all jurisdictions to get behind AEMO’s guidance to deliver for consumers rather than developing their own unique planning approaches,” said Ms McNamara.

About the Australian Energy Council

The Council represents 20 major electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia, sell gas and electricity to over 10 million homes and businesses, and are major investors in renewable energy generation.

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