Massive economic benefits for households and businesses from a reliable renewable electricity grid

The Australian Energy Market Operator (AEMO) has tested 1000 scenarios to ensure the lowest-cost plan that will also meet our growing electricity needs and keep the grid reliable between now and 2050.

AEMO’s plan finalises the December 2023 Draft ISP, and is designed in collaboration with 2,100 technical and delivery specialists, investors and experts from across the energy industry, plus consumer and community representatives.

It confirms reliable renewable energy available 24/7 with battery and pumped hydro storage, and flexible gas provides the most economic benefits for households and industry.

It shows:

• Australia is well underway in transforming its energy system
• Renewables in the National Energy Market momentarily reached 72% in 2023, with average penetration reaching just under 40%
• AEMO will soon be managing an energy system that is at times supplied entirely by renewable energy - this means the grid needs more flexible power
• In the past 12 months, 13.5 GW of generation and storage projects were approved for grid connection
• Half of the 5,000km of transmission lines needed by 2030 is already underway
• More than 60,000 people could be directly employed to build and maintain the new energy infrastructure between now and 2050
• Coal is becoming more unreliable, more expensive and difficult to maintain, and less competitive against renewable electricity supply
• Consumers are at risk of bill price shocks if coal generators close on short notice, or fail

AEMO’s roadmap shows the Albanese Government’s ambitious but achievable targets to deliver 82 per cent renewables into the grid by 2030 and hit net zero by 2050, are achievable and will deliver $22 billion in benefits that would not materialise if a different mix of renewables and transmission was adopted. The ISP shows strong progress already towards that goal.

It calls for urgent investment in generation, storage and transmission which we agree with. Investment certainty is crucial to Australia’s future, and why nuclear is so wrong for Australia because amongst other things, it undermines investment certainty. Nuclear does nothing to provide secure, reliable and affordable electricity for Australians now.

In the six months since the draft ISP was released, nearly 5 GW of new solar and wind generation has progressed through the development pipeline and is now factored into projections. Similarly, the pipeline of storage projects has more than doubled in the same period.

AEMO’s comprehensive modelling shows State and Federal policy settings are right, getting Australia’s electricity grid to net zero by 2050.

These include $20 billion to support transmission projects under Rewiring the Nation, underwriting for private investment to build 32 GW of generation and storage under our Capacity Investment Scheme, our Offshore Wind strategy, and the Mandatory Gas Code of Conduct which is delivering more domestic supply into the market over the next seven years.

Benefits are driven by low long-term costs. As AEMO says, “the lower those long-term costs are ... the lower energy prices will be.”

AEMO estimates the capital cost for necessary new transmission lines, plus all the new utility-scale solar, wind, storage, hydro and gas required to meet Australia’s energy needs by 2050, has a present value of $122 billion.

It also shows that we can reduce the need for up to $4 billion in infrastructure including transmission, through strong coordination of consumer energy products and services, such as solar panels, batteries and heat pumps.

Our grid is changing rapidly – one in three households now have rooftop solar, with uptake of batteries and electric vehicles on the rise too. It’s why we’ve put households first, rolling out $1.7 billion into energy saving upgrades for homes, businesses, and social housing.

Comments attributable to Minister for Climate Change and Energy, Chris Bowen:

“The Albanese Government’s reliable renewables plan is the only plan supported by experts to deliver the clean, cheap, reliable and resilient energy system that Australians deserve.

“AEMO tested 1,000 scenarios to identify the lowest-cost plan that would also meet our growing electricity needs and keep the grid reliable between now and 2050.

“It is in stark contrast to the Coalition’s anti-renewables nuclear plan which will see Australians pay hundreds of billions for the reactors alone, would provide at best 4 per cent of Australia’s energy needs by 2050, and could add $1000 a year to energy bills.

“We know nuclear is the most expensive form of energy – so Australians will pay twice, in higher taxes and higher bills.

“Peter Dutton’s anti-renewables obsession hides the cost Australians will pay for his reactors and ignores the fact renewables are the cheapest form of energy, and getting more renewables into the system brings prices down.”

AEMO’s 2024 ISP report is available here.