Energy Operator Lays Out Action Plan For 75% Renewables By 2025

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The Australian Energy Market Operator has released its action plan that would see Australia receiving 75% of the energy entering its grid coming from renewable sources like wind and solar power before the decade is over.

The news comes via the AEMO’s Renewable Integration Study or RIS, which you can access here, stating that Australia has the technical skills to implement a high level of wind and solar, but an update to the market and regulatory environment is necessary to facilitate the change.

Audrey Zibelman, Chief Executive at the AEMO says that the plan is very much achievable for Australia. “Australia already has the technical capability to safely operate a power system where three-quarters of our energy at times comes from wind and solar energy generation,” she said in an accompanying statement.

“However, to do so requires changes in our markets and regulatory requirements. Otherwise, AEMO will be required to limit the contribution of these wind and solar resources to 50 or 60 per cent of electricity supply at any point in time, even though they are the lowest cost way of providing electricity.”

"We don’t want market and regulatory reform to get in the way of the benefits of cheaper and more efficient technologies.” Audrey Zibelman

The AEMO is warning that without sufficient changes to the rules and regulations that govern the electricity grid to accommodate renewables, the potential uptake of wind and solar power into Australia’s grid would be limited. The report states that “given the pace and complexity of change in the NEM, the [report] highlights the need for flexible market and regulatory frameworks that can adapt swiftly and effectively as the power system evolves.”

Recently, wind and solar sources of energy have accounted for as much as 50 per cent of the National Energy Market, and this stands even higher on a state-by-state basis with up to 140 per cent of wind and solar powering South Australia.

Zibelman called on the Energy Security Board to bring in changes to the market’s design, and according to a report from Renew Economy, “most of all, AEMO wants great flexibility, but is also pushing for what are known as ‘day ahead’ markets, ensuring the operator has better visibility of what supply will be available, and wants to create new markets for key services such as ‘inertia’ and voltage.”

That same report states that the AEMO is looking to recreate Western Australia’s distributed energy road map for the nation’s energy grid, while pushing for new standards for inverters that would make existing rooftop solar cells and battery storage units even more effective in powering dwellings, as well as adding to the grid’s power.

The penetration of rooftop solar is expected to top 85 per cent in South Australia by 2025, while Victoria and Queensland are expected to hit 50 per cent in the same timeframe.

The AEMO was clear that despite persistent doubts, misinformation and lobbying from the mining and fossil fuel industry, achieving a high rate of renewable energy penetration in the national grid is an achievable short-term goal.

“There is a risk of inaction and a cost of inaction- we need to avoid that."

“Beyond 2025, AEMO has not identified any insurmountable reasons why the NEM cannot operate securely at even higher levels of wind and solar penetration, especially with ongoing technological advancement worldwide,” notes the report, which includes a graphic mapping Australia’s potential journey to 90 per cent renewables in the main grid by 2040.

Zibelman also told Renew Economy that “the challenge is that it was difficult to envision the internet before the internet came, and smartphones before the arrival of smartphones. We see these changes because we experience them every day.”

“Ultimately, the issue is this: we want electricity to remain affordable, reliable and secure… we need to adapt so the consumers can get the benefit of the technical innovation. That’s really our goal,” she said. Zibelman hopes that the AEMO’s report will help to speed up the rate of change in the regulatory and legal environment, to create an adaptable set of rules in the energy market’s framework that accommodates renewable energy.

“To manage future operating scenarios with even higher penetrations of wind and solar resources (and potentially more participants), new operating tools, processes and market changes will be needed to automate the decision-making and scheduling process to efficiently source the required system services and ascribe a market value to them,” the report adds.

Zibelman says she has been aiming toward Australia implementing an ‘ahead’ market, which would act to service possible disruptions or sudden jumps in demand, and address problems like inertia, frequency and voltage.

“All this was once provided by a large centralised generation,” she said, “now we need to buy it from other sources. We can’t do that in real-time… we need to make sure that it is available before then. The alternative is to do what we do in South Australia (where the AEMO issues repeated directions to the market). That is more expensive, and that is a failure in the market because it is not sending the right price signals.”

“When you don’t have price signals that are durable, no one will invest, unless AEMO pays an administration price,” she said. “We need flexibility and adaptability… we need to be able to pay for resources that can ramp on and ramp off, and can turn on and turn off. Our problems will be low demand and high demand, and both of those can happen in the same week.”

Zibelman concluded by stating that “there is a risk of inaction and a cost of inaction- we need to avoid that. I’m optimistic that (the regulatory and market changes) can be done and that we have enough time to get it done. We don’t want market and regulatory reform to get in the way of the benefits of cheaper and more efficient technologies.”

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