The Australian Energy Market Operator has concluded its consultation process, begun in February this year, gathering the written submissions of 25 stakeholders and feedback from briefings and workshops, to adapt its inputs, scenarios and assumptions for the next version of Australia’s guiding Integrated Systems Plan (ISP).
“The overwhelming theme that dominated almost all submissions,” says the final report, 2019 Planning and Forecasting Consultation Responses on Scenarios, Inputs, Assumptions and Methodology , “was for AEMO to consider scenarios with stronger ambitions for emission abatement, consistent with the aim of the Paris Agreement to limit global warming to well below 2 degrees Celsius.”
As the Investor Group on Climate Change (IGCC) pointed out in its submission, all major National Electricity Market (NEM) regions have already committed to achieving net zero emissions by 2050.
And, the report says, “Infigen suggested that AEMO needed to consider a balance between current policies and the transformation required by the Paris Agreement (for which there is bipartisan support).”
The result is scenario No. 5, the Step Change scenario, which will model technology development at large scale, alongside consumer-led innovation and “the highest degree of electrification of the transport sector” — actions perceived as necessary for Australia to meet decarbonisation targets set in Paris in 2016.
As a result of stakeholder opinions that the originally proposed four scenarios did not capture the range of possible energy futures affecting the NEM more generally, these have also been adjusted and redefined to become:
- The Central scenario (previously Gradual Change), which represents the current pace of transition of Australia’s energy industry and will investigate expected developments given existing signals.
- The Slow Change scenario in which low political, commercial and consumer motivation to invest in emissions reduction leads to a general slowing down of transition.
- The Fast Change scenario characterised by rapid advancements in grid-scale technology in tandem with policy that supports the achievement of emissions reductions, “leading to manufacturing advancements automation and integration of transport into the energy sector”.
- The High DER (distributed energy resource) scenario of accelerated consumer-led transformation, in which technology players increase innovation in interactive technologies that allow consumers to actively control and manage their energy costs and preferences, and within which EVs rule.
Distributed energy resource reframed
The 2018 ISP assumed a positive relationship between customer hardship and rooftop solar investment. Post-consultation, AEMO agrees that, “The more likely drivers of DER investment are economic and population growth,” and it “will now consider a broader range of possible DER outcomes.”
In the revised scenario line-up, the High DER picture is presented as an alternative to large-scale generation investment, but the report says DER will also figure prominently in the Fast Change and Step Change scenarios.
Depending on the scenario, the forecast allows for wide range in the uptake of rooftop PV, batteries and EVs:
- In 2030 the NEM is expected to have at least 9.6 GW of rooftop PV, with a possible upper estimate of 22.4 GW. Integrated battery installations are projected to range between 0.8 GW and 15.9 GW. And EVs will consume somewhere between 600 GWh and 7,710 GWh of electricity.
- By 2050, rooftop PV will have doubled again (to between 17.9 to 41.3 GW); batteries may have cracked the residential ROI code to achieve an upper forecast of 45.1 GW; and EVs too are expected to be much more prominent in garages and camping grounds all over the country, soaking up between 17,130 and 41,800 GWh of electric power.
Development of large scale solar will find new opportunities as the ISP incorporates three extra Renewable Energy Zones (REZs): Wide Bay in Queensland, Wagga Wagga in New South Wales, and in Central Northern Victoria around the Glenrowan and Shepparton terminal stations. Stakeholder submissions also led to adjustments of other REZ boundaries.
TransGrid is described in the report as having raised the chicken-and-egg dilemma: “that new generation projects in high-quality REZs cannot be committed without transmission access, but proactive transmission expansion is not supported.”
AEMO responds in the report that the ISP is intended to identify the most economically efficient development plan. As such it considers “detailed network augmentation options and costings for specific REZs”, “network replacement timing” and “synergies between REZ development and interconnector routes”; but it “does not directly address funding and regulatory arrangements”.
MLFs marked for further consideration
No consideration of connection points and high-resource zones would be complete without tackling marginal loss factor (MLF). Stakeholders taking part in AEMO’s consultation process proposed a variety of suggestions and changes.
Tesla suggested that battery storage would provide MLF stabilisation, and that assumptions on the benefits of co-located storage should be included in REZ assessments. WSP Australia noted that noted that “dynamic MLFs should be considered in the modelling to determine the optimal location, timing, and choice of new utility-scale generation”. Infigen Energy suggested that the ISP consider the long-term trajectory of MLFs associated with various transmission connection points such as those associated with REZs, arguing that “understanding both congestion and loss impacts over time would … help inform investment decisions in the market”.
In response, AEMO will implement a number of revisions to its modelling approach, but it reports that despite having actively considered how to model dynamic MLFs within the ISP modelling framework, it “has not found an appropriate method while maintaining a tractable response time for its models”.
It promises to “continue to investigate iteratively the interaction that will exist between network losses and generation development drivers affecting generation technologies and locations, and research other ways to capture the effect of losses more dynamically.”
With rigorous and inclusive consultation in hand, AEMO will now progress to developing the next iteration of its ISP, to be delivered in the first half of 2020, and providing guidelines to further actionable projects.