Spring has only just begun, but in many areas across the country, we’re already sweltering. A massive heat wave swept through our eastern cities and towns in September, but that may be just the beginning, with the Australian Energy Market Operator (AEMO) forecasting an “elevated level of risk” this summer compared with recent years.
The Rising Threat of Summer Heatwaves
Driving these fears are the hotter and drier conditions, together with lower levels of reliability from our coal-fired generator. AEMO reports that government programs and a raft of new, existing, committed and anticipated projects could fill supply gaps as coal plants close.
However, the report’s central scenario predicts that reliability risks will exceed “the relevant reliability standard” in Victoria and South Australia from this summer, and in New South Wales from 2025 and in Queensland from 2029.
Delays in Clean Energy Investment Approvals
Furthermore, delays in clean energy investment approvals – such as Snowy Hydro’s 2.0 pumped hydro project, Australia’s largest committed renewable energy project at a reported cost of $12 billion – could impact our national transition from fossil fuels to renewables.
Supply Gaps and the Future of Coal Plants
The federal government is in talks with the NSW Labor government, flagging the potential of extending the life of Australia’s largest coal-fired power station, Eraring Power Station, beyond 2025. Right now, how that will take shape (and whether taxpayers could foot the bill) is still up for debate.
Outside of electricity, producers of gas on the east coast are beginning to publish how much uncommitted gas they have available over the next 24 months, as required under the federal government’s new code of conduct. Producers have so far declared they have between 188 and 237 petajoules of uncontracted gas for sale, which is not enough to eliminate fears that declining supply could lead to shortages next winter.
Meanwhile, we’re still no closer to uncovering what caused the explosive fire and failure of Queensland’s Callide C coal power station back in May 2021 – which kicked off a sustained outage of the power station and pushed up electricity prices. The damaged units are still not back in use, with delays expected well into 2024, putting even further pressure on the grid.
With so much volatility and an inconsistent market outlook, only one thing is certain: consumers in both residential and business environments can expect to pay more for their energy.
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