AEMO: Integrated System Plan spurs wide-ranging reactions

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What report were they reading? This was the reaction of many when reading the Australian Energy Market Operator’s (AEMO) Integrated System Plan for the National Electricity Market, released earlier this month. As AEMO CEO Audrey Zibelman noted while a guest on Reneweconomy’s Energy Insiders podcast, like the Rorschach inkblot test or modern art it was possible for everyone to read what he or she will into the findings. 

Press coverage of the latest report was also tremendously varied, ranging from celebrating King Coal’s rule for another 20 years to hailing the major triumph of renewables and their inevitable dominance in the future.

Indeed, AEMO provides enough material for both sides to back up their versions. It recognizes the importance of maintaining existing coal-fired generation, but also underlines the lowest-cost replacement option for retiring coal plants is a combination of solar (28 GW), wind (10.5 GW) and storage (17 GW and 90 GWh), complemented by 500 MW of flexible gas plant and transmission investment.

It all comes down to the choice of perspective.

Noting that the AEMO report clearly states that it will be cheaper to replace some 30% of coal power plants decommissioned in the next 20 years with renewables than with new coal plants, Guardian Australia argues that the AEMO report is a blow to Coalition MPs campaigning for new coal-fired generation.

Echoing Energy Minister Josh Frydenberg’s interpretation, The Australian highlighted that the AEMO report finds the cheapest power will come from keeping existing coal-fired power stations open for as long as possible.

The center-right newspaper carried a headline hailing the rule of King Coal, which pleased Resources Minister and coal advocate Matt Canavan so much that he tweeted a screenshot of the story.

In addition, The Australian released a Newspoll showing voters believe the federal Coalition has the best approach to energy policy in terms of keeping prices down and maintaining reliable energy supply, and made sure the voices in favor of coal were heard.

One of the most widely reported statements, but also a fine example of liberal interpreting, was Minister Frydenberg’s announcement that the report doesn’t preclude a new coal-fired power station being built. This comes on top of his previous pressures on energy retailer AGL to sell the aging Liddell coal-fired power station in New South Wales instead of closing it.

However, the fact that the AEMO report does not call for an expansion of the coal sector, but rather a retention of the existing coal-fired generators was clearly outlined in The Sydney Morning Herald’s coverage

Nonetheless, Minister Frydenberg was quite right about one thing – the report lends support to the National Energy Guarantee (NEG). It unambiguously compliments the intentions of the NEG in terms of smooth transition and encouragement it gives to the deployment of renewable generation with an eye on low emissions.

So far, one thing is certain – the discussion on the report will continue at the Council of Australian Government (COAG) Energy Council meeting on 10 August, when Minister Frydenberg will seek a unanimous vote from state and territory energy ministers to put the NEG into effect.