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Reliability outlook improves in the National Electricity Market

27 August 2020

The Australian Energy Market Operator’s (AEMO) 2020 Electricity Statement of Opportunities (ESOO) confirms Australian households and businesses will have reliable access to electricity this summer.

All regions across the National Electricity Market (NEM) are forecast to meet the reliability standard this summer, giving energy consumers confidence the lights and air-conditioners will stay on.

The improved reliability outlook is due to lower forecast peak demand, minor generation and transmission augmentations, and significant development of large-scale renewable resources.

Minister for Energy and Emissions Reduction Angus Taylor said the ESOO highlighted that the NEM is well positioned to deliver the secure, reliable and affordable power businesses and households need this summer.

“Energy reliability has been a key focus of the Morrison Government,” Minister Taylor said.

“Blackouts during Australian summers have been far too familiar and far too common in recent years, and we have taken strong action to minimise this.

“Beyond this summer, we are aware of some challenges which is why the Government is committed to the $1 billion Grid Reliability Fund and the Underwriting New Generation Investment program to address these.”

The ESOO also details the impact of COVID-19 on the NEM, with the pandemic reducing forecast peak demand and energy consumption for the coming summer.

However, AEMO notes that the coronavirus crisis has also created increased uncertainty, particularly in regard to potentially delaying power station maintenance, and changes in energy demand as the economy emerges from the pandemic.

“Like all sectors of the economy, the energy industry is not immune to the  impact of COVID-19,” Minister Taylor said.

“The Government will continue to work closely with industry and energy market bodies to manage the impacts on our energy sector and ensure the lights stay on.”

Looking ahead, AEMO highlights the potential of reliability challenges in New South Wales following the planned closure of the Liddell power station in 2023.The ESOO makes it clear that New South Wales may be vulnerable to reliability issues when there is peak demand, generator outages and low renewable generation, unless sufficient replacement generation comes into the market.

This highlights the importance of the Government’s support for projects like Snowy 2.0 and the Queensland to New South Wales Interconnector (QNI), which will help alleviate some of these supply risks.

“We want to avoid a repeat of Victoria’s pitfalls after the closure of the Hazelwood power plant,” Minister Taylor said.

“This is why the Government is supporting landmark projects like Snowy 2.0, but the private sector also needs to step up to make concrete commitments to invest in new dispatchable replacement capacity.”

The Government will continue to make informed decisions, including around generation and transmission investment, to ensure families, businesses and industries in New South Wales and across Australia have affordable and reliable power.

Media contact:

Minister Taylor's office: 02 6277 7120