BRISBANE, Australia — Governments and industries have time to build a more reliable and cleaner electricity system if plans are put in place now.
That is the conclusion of an options paper released by the Energy Security Board, which was given the task in March 2019 of redesigning the national electricity market.
An influx of renewable power and the retirement of old, coal-fired generation is pushing the existing energy system to its technical limits.
The Energy Security Board is set to advise energy ministers mid-year on how best to tackle the many problems involved in getting a new system up and running.
“The rapid spread of large-scale wind and solar, along with rooftop photovoltaic, across Australia means our energy system is experiencing the fastest and most substantial change in the world,” said Kerry Schott, head of the Energy Security Board.
“We are preparing the advice ministers to need to enable the critical decisions needed for an affordable, reliable, and secure electricity system that can ultimately operate at net zero emissions.”
The first of four work areas prepare for an orderly retirement of coal-fired power by enabling the timely entry of new generation, storage, and firming capacity.
Among the options are modifications of the new “retailer reliability obligation,” which requires retailers to buy advance contracts to fill supply gaps, a possible new operating reserve, and long-term transition cost monitoring.
However, the Australia Institute’s Dan Cass said governments needed to ensure this area of work did not embrace a “perilous proposal that would prolong the lives of unprofitable, highly polluting coal power stations in Australia.”
“The whole purpose of the market redesign is to allow coal to retire safely and for consumers to benefit from a smooth transition to cleaner, cheaper sources of electricity and grid security services,” he said.
“It is unbelievable that as Australia’s allies and trading partners phase down coal power, Australia could consider extending its reliance on coal. This will damage our international reputation, push up prices for industry and households, and harm competition.”
The second area of work needed is on backing up power system security.
Security is about keeping the lights on by maintaining the power system’s technical parameters like voltage, frequency, and current flows under control and within safe limits.
It’s been recommended either a new operating reserve or another procurement mechanism be put in place to shore up the power supply without imposing too high a cost on consumers.
The third innovation is making sure consumers install solar photovoltaics, batteries, and smart appliances to reap the benefits of doing so while not putting the system at risk.
The change could include new consumer protections and technical standards, tariff and pricing reforms, management of minimum demand, and further investigation of flexible trading arrangements.
A fourth reform is opening the power grid to cheaper large-scale renewables through a series of priority “renewable energy zones,” which would ensure generation and transmission are done in a planned way.
“This is the best chance we have of setting up Australia’s energy system for the future. We cannot kick these challenges any further down the road,” said Schott.
Energy Minister Angus Taylor said the options paper was an important step in ensuring the national energy market was fit for purpose, put downward pressure on prices, and kept the lights on.
He noted it included the option of retaining existing coal-fired power “for as long as it is needed.”
“This important work must deliver affordable, reliable power, supported by the right mix of technologies, deliver value-for-money construction of transmission, where it is needed, and adapt to the significant evolution occurring in our market,” he said.
(Edited by Vaibhav Vishwanath Pawar and Saptak Datta.)
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