The Electricity Statement of Opportunities (ESOO) forecasts electricity supply reliability in the National Electricity Market (NEM) over a 10-year period to inform decisions by market participants, investors, and policy-makers. From this year, the ESOO will include a reliability forecast identifying any potential reliability gaps in the coming five years, as defined according to the Retailer Reliability Obligation (RRO). The final five years of the 10-year ESOO forecast provide an indicative forecast of any future material reliability gaps.
The 2019 ESOO forecasts a continued elevated risk of expected unserved energy (USE) over the next 10 years. Compared to last year’s ESOO forecast, and based on improved model representation of input uncertainties, AEMO observes greater risks of load shedding due to uncontrollable, but increasingly likely, high impact (‘tail risk’) events such as coincident unplanned outages. The forecast reaffirms that targeted actions must be taken now to provide additional dispatchable capacity to reduce the risks of supply interruptions during peak summer periods.
- AEMO forecasts tightly balanced supply and demand in several NEM regions for summer 2019-20, with all regions other than Victoria expected to meet the current reliability standard of expected USE not exceeding 0.002%.
- In Victoria, if extended into the peak summer period, the unplanned outages of two major power stations, Loy Yang A2 (500 megawatts [MW]) and Mortlake 2 (259 MW), pose a significant risk of insufficient supply that could lead to material involuntary load shedding.
Forecasts beyond 2020
- Beyond 2020, AEMO forecasts only slight improvements in reliability for peak summer periods until new transmission and dispatchable supply and demand resources become available. AEMO’s 2019 ESOO reaffirms the message in the 2018 ESOO that additional investment will be required in a portfolio of resources ahead of time to replace retiring capacity.
- This ESOO analysis includes nearly five gigawatts (GW) of committed new generation projects and upgrades to existing generators expected to become available over the next three years, in addition to Snowy 2.0 (2,040 MW), which has been assumed to be fully operational by March 2025.
- Most of the announced new generation projects are variable renewable energy generators, which often do not generate at full capacity during peak demand times or may be positioned in a congested part of the network. As a result, while providing significant additional energy during many hours of the year, these projects are forecast to only make a limited contribution to meeting demand during peak hours.
- The announced staggered closure of Torrens Island A Power Station will reduce available capacity in South Australia, causing a slow increase in expected USE to 0.0004% by 2021-22. The new proposed interconnector between South Australia and New South Wales is not modelled in this assessment, as it is not yet a committed project, but would reduce this risk by improving the sharing of resources across the NEM.