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Aug 22 2019

Reliability outlook remains stable

The latest independent assessment of the energy market’s power supply has reinforced the continued need for dispatchable power in the system to ensure ongoing reliability and stability.

The Australian Energy Council said the Australian Energy Market Operator’s latest Electricity Statement of Opportunities shows that the supply to the grid will remain within reliability standards even after the closure of the coal-fired Liddell power station in New South Wales from 2022. 

AEMO’s assessment indicates that NSW will meet the reliability standard after the closure of Liddell with the existing supply.  Additional supply or transmission options likely to emerge in that timeframe will provide additional confidence.

However, the report highlights that supply has tightened in the National Electricity Market and particularly in Victoria.

While recent commentary has focussed on older fossil fuel plants becoming less reliable, recent analysis of data from 2016-2018 does not generally support the argument that generation trips are occurring more during hotter weather or that the plants are becoming less reliable.

AEMO’s prediction for the summer ahead clearly indicates that when demand for electricity is at its highest, coal will reliably generate about 90 per cent of the time.

Dispatchable power will remain critical to supply customers reliably, especially as the industry moves to obtain more of its energy from renewable sources.

AEMO’s review of reliability in the system, suggests it will not need to invoke the newly introduced Retailer Reliability Obligation that requires energy companies to meet reliability levels if gaps in supply are identified by the regulator.

About the Australian Energy Council

The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.

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