URGENT UPDATE: South Australia has been confirmed as the world’s most advanced and secure renewable energy grid, but New South Wales (NSW) is scrambling to avert a looming crisis as it nears a “no coal” scenario. According to a pivotal report released by the Australian Energy Market Operator (AEMO) today, South Australia is uniquely positioned to manage its energy transition thanks to a staggering 75 percent share of wind and solar power.
The report, titled The Transition Plan for System Security, highlights South Australia as the only region not facing a system strength deficit in the near future. This remarkable achievement stems from the state’s rapid transition away from coal, with its last coal-fired power station closing in 2016. With a robust infrastructure of battery storage and synchronous condensers, South Australia is on track to operate its gigawatt-scale grid entirely without gas by 2027.
In stark contrast, NSW is under immense pressure as the closure of its aging coal generators, including the 2.88 GW Eraring plant, looms closer. AEMO warns that without immediate intervention, NSW could face severe reliability issues by 2027, particularly if Eraring shuts down as planned. Officials are rushing to secure contracts for 10 small synchronous condensers and up to 5 GW of grid-forming battery inverters, but time is running out.
AEMO’s report emphasizes the urgent need for additional synchronous generation resources, stating,
“Risks of needing to de-energise assets and shed load may also arise if there are insufficient synchronous generators available to direct, particularly under outage conditions.”
The situation is compounded by the possibility of further coal generation decommissioning shortly after Eraring’s retirement, exacerbating existing vulnerabilities.
Looking ahead, AEMO predicts that NSW might encounter a “credible no coal scenario” as soon as 2031/32. This scenario could see periods where no coal generation is available, raising significant concerns for energy security. Similar challenges are also anticipated in Victoria with the planned closure of the Yallourn plant in 2028 and in Queensland with the shutdown of the Gladstone coal generator in 2029.
As the energy landscape shifts dramatically, AEMO’s CEO Daniel Westerman stresses the importance of timely investments and reforms to maintain system security. He stated,
“New investments and reforms are needed to maintain system security in advance of these transition points.”
The urgency of these developments cannot be overstated. With Australia aiming to meet its ambitious 2030 and 2035 renewable energy targets, the pressure is mounting on state governments and operators to adapt swiftly. The report serves as a call to action for stakeholders across the industry, as the transition to a high-renewable grid is crucial for achieving Australia’s energy goals.
As the situation unfolds, all eyes will be on NSW and its efforts to secure a reliable energy future. The rapid evolution of South Australia’s renewable grid offers a blueprint for success, but can NSW navigate the challenges ahead before it’s too late? Stay tuned for the latest updates on this critical energy transition.
