The AEMO has released the Draft 2024 Integrated System Plan (ISP), outlining the optimal investment paths for Australia’s energy transition towards a net-zero economy by 2050.
Over the past 18 months, AEMO has collaborated with over 1,300 stakeholders, produced 60 presentations and reports, and considered 110 submissions to develop the latest plan for the National Electricity Market (NEM).
AEMO CEO Daniel Westerman underscores the need for urgent investment to guarantee safe, reliable, and affordable energy access for Australians.
“AEMO has worked closely with industry, governments and consumer representatives to develop this plan in the interests of energy consumers,” Westerman said.
He explained that the plan outlines urgent investment to ensure reliable and affordable energy, especially as 90% of coal generation retires in the coming decade and beyond 2050.
“As with previous reports, this plan shows that the lowest-cost pathway for secure and reliable electricity is from renewable energy, connected by transmission, supported by batteries and pumped hydro, and backed up by gas-powered generation,” he added.
AEMO has developed the Draft 2024 ISP considering various factors such as government energy policies, infrastructure costs, future electricity consumption trends, consumer and grid-scale generation and storage, transmission upgrade options, and power system reliability and security needs.
AEMO’s future trends are based on a ‘step change’ scenario, influenced by industry experts, government representatives, generators, retailers, researchers, academics, and consumer advocates, indicating the most likely planning activities.
“To identify the optimal development path to 2050, we used Australia’s most comprehensive set of power system and market models to assess the benefits and risks of more than 1,000 potential pathways,” Westerman said.
“Delivering the transmission projects identified in this plan is expected to avoid $17 billion in additional costs to consumers if those projects were not delivered,” he stated.
To provide this low-cost path to secure and reliable electricity, the plan calls for investments that would:
- Add nearly 10,000 km of new and upgraded transmission by 2050, as highlighted in previous plans, with around a quarter underway and half to be delivered in the next decade.
- Triple grid-scale variable renewable generation by 2030 (57 GW) and increase it seven-fold by 2050 (126 GW).
- Add almost four times the firming capacity from dispatchable storage, hydro and gas-powered generation by 2050 (74 GW).
- Support a four-fold increase in rooftop solar capacity by 2050 (72 GW), capable of providing additional benefits to consumers if coordinated and responsive to market and operational signals.
“Our updated analysis shows that Australia’s coal power stations are likely to close earlier than planned, and Australians are electrifying their homes and businesses at a faster rate,” Westerman said.
“In the next decade, this plan shows the need for 5,000 km of transmission, both new projects and those underway, triple renewable generation and double dispatchable storage, hydro and gas-powered generation,” he stated.
The investment in grid-scale energy systems includes rooftop solar, batteries, and electric vehicles to ensure energy reliability and secure power system operation.
“While progress is being made, the transition is urgent and faces significant risks if market and policy settings, social licence and supply chain issues are not addressed,” Mr Westerman added.
With the introduction of the Draft 2024 ISP, all stakeholders are encouraged to participate in the upcoming consultations, including public forums, and to submit written submissions by 16 February 2024, after which AEMO will complete the 2024 ISP by 28 June 2024.
