It’s that time of year again – AEMO has released its latest Electricity Statement of Opportunities.
In case you missed it, last year’s ESOO caused quite a media stir, with summer energy supply shortfalls forecast, and consumer participation falling short of AEMO’s previous assessments.
So, what’s new in the ESOO for 2024? Our energy specialists will be breaking down the key takeaways below, and what it means for your business.
What is the Electricity Statement of Opportunities (ESOO)
The ESOO is a 10-year reliability outlook produced by the Australian Energy Market Operator (AEMO) every year.
It delivers a comprehensive assessment of the state of the grid and energy supply in the NEM. AEMO’s assessment is based on assets that are either built, committed, or anticipated. To the extent that AEMO’s assessment shows supply not meeting demand, it highlights opportunities for future investment.
Reliability is on the up for 2024
Things are looking up from last year’s ESOO, with significant improvements to the reliability outlook. This is thanks to an additional 5.7 GW of grid-scale generation and storage and 365 km of new transmission developments.
Investments in renewable generation and storage capacity continue to increase, with a promising pipeline of future developments. This will help fill the gaps left by the steady retirement of coal fired power stations, with ongoing closures in progress since 2012.
In a statement accompanying the release of the ESOO, AEMO CEO Daniel Westerman, said the energy transition is well underway, with renewable generation already supplying 40% of the electricity to east coast homes and businesses.
Other factors for the improved reliability outlook include the extension to the closure date of Eraring Power Station in New South Wales, an ongoing increase in rooftop solar capacity, plus projections of lower growth in energy consumption and maximum demand for most NEM regions than previously forecast.
Long-term risks are still present
As echoed every year in the ESOO, the importance of delivering the pipeline of projects on time and in full is vital.
Modelling indicates reliability gaps at times over the next 10 years if these projects are delayed. Although these gaps are predicted to be less significant than previous forecasts, they still present a risk to reliability.
Safeguarding the power system for summer
The ESOO emphasises that the reliable operation of existing coal, gas and renewables is critical for maintaining uninterrupted supply.
Through the majority of the year, there is more than enough electricity in the grid to meet demand – but as summer rolls around, the hot summer days lead to spikes in demand, and unscheduled outages at ageing coal plants.
To manage this risk for the upcoming summer, AEMO is tendering for off-market backup electricity reserves in Victoria, New South Wales and South Australia. This is likely to come from demand management, through AEMO’s Reliability and Reserve Trader (RERT) mechanism. Learn more about RERT
The 2024 ESOO is a call to action
While the immediate pressure on the system has eased, it’s clear that we must maintain momentum to stay on track for system reliability.
Inevitably, there will be project delays, unscheduled outages and other barriers to overcome – but there is also growing opportunity for rooftop solar, batteries and EVs to actively participate in the power system to counteract this, as outlined in the recently published National CER Roadmap.
We need more zero-emissions energy capacity approved and built, particularly utility-scale renewables and storage, more intelligent management of flexible energy loads, and more engaged consumers who can play their part in reshaping energy demand.
What does this mean for businesses?
If your business has flexible operations, or primarily uses energy during the day, it could be part of the solution laid out in the ESOO.
Flow Power is helping businesses move away from standard peak and off-peak contracts, and shape their usage to real-time renewable energy generation on the wholesale electricity market.
This small change in energy behavior can help your business save money, reduce its carbon footprint and play a part in supporting Australia’s renewable transition.
Questions?
If you have further questions about the ESOO, how this could impact your business, or ways Flow Power can help optimise your electricity use, reach out to one of our energy specialists today.
