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NEM requires critical investment

Investment needed to maintain reliability of domestic energy.

The Australian Energy Market Operator (AEMO) says that critical investment is required to meet the commercial and domestic energy needs of mainland Australia’s future.

AEMO’s update to the electricity statement of opportunities (ESOO) report – written in response to changes in material generation capacity since it was written in 2022 – has confirmed the urgent need for investment.

According to the update, investment is required in generation, long-duration storage and transmission if the energy sector is to meet its reliability requirements over the next 10 years.

AEMO CEO Daniel Westerman said that update reiterates the critical need for timely investment to fill forecast reliability gaps as the country moves away from coal generation.

“Reliability gaps begin to emerge against the Interim Reliability Measure from 2025 onwards,” he said.

“These gaps widen until all mainland states in the NEM are forecast to breach the reliability standard from 2027 onwards, with at least five coal power stations totalling approximately 13 per cent of the NEM’s total capacity expected to retire.”

Near-term reliability has been strengthened by the delayed closure of a number of facilities – the Osborne and Bolivar power stations in SA, and the Waratah Super Battery in NSW.

“The NEM has a strong pipeline of proposed generation and storage projects, totalling three times today’s generation capacity, with large-scale solar, wind and batteries accounting for 86 per cent,” said Westerman.

“Investment in firming generation, such as pumped hydro, gas and long-duration batteries, is critical to complement our growing fleet of weather-dependent renewable generation to meet electricity demand without coal generation.”

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