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Australia Market: AEMO forecasts the end of coal

Net zero pledges: how to make yours count

Coal-fired power generators are expected to shut down nearly three times faster than previously anticipated and will have exited Australia’s National Electricity Market (NEM) entirely by 2043, according to the Australian Energy Market Operator (AEMO).

In its draft Integrated System Plan (ISP), published on 10 December, AEMO noted that what used to be called the “step change” scenario has now become the “central scenario”. For the first time, this scenario is consistent with Australia’s commitment under the Paris Agreement and limiting global temperature rise to under 2 degrees Celsius.

Electricity demand is expected to double between now and 2050. “Today the NEM delivers just under 180TWh of electricity to industry and homes per year. The NEM would need to nearly double that by 2050,” the draft plan states.

While coal-fired power stations currently contribute 23GW of energy to the NEM, the ISP is forecasting that huge volumes of coal will be retired in the next ten years, including all brown coal and two-thirds of black coal, and significant investments in new renewables and “firming technologies” (such as batteries, gas, and pumped hydro) will take their place.

5GW of coal generation is expected to be withdrawn by 2030 and as much as 14GW to be withdrawn by 2030 and to have entirely exited the electricity market by 2043. Around 9GW of gas-fired generation and an extra 620GW hours of storage (provided by batteries or pumped hydro) will be required to provide backup capacity.

Australia Market: AEMO forecasts the end of coal

Source: AEMO

The ISP is a 30-year roadmap for the efficient development of the NEM and presents an “optimal development path”, a coordinated generation and transmission investment plan to transition the power system.

GridBeyond Co-Founder and Chief Executive Michael Phelan said:

“This report charts one of the most ambitious transitions to a zero carbon power sector. One of the biggest challenges for the grid operator will be getting ready for periods of 100% renewables. Urgent and extensive industry collaboration and effort are needed to engineer the power system to meet these new conditions. But it is clear that demand response and balancing services will need to play a fundamental role to ensure the reliability of the grid.”


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