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Renewables in the Australian National Electricity Market current status, future prospects
Iain MacGill Associate Professor, School of Electrical Engineering and Telecommunications Joint Director (Engineering), CEEM
University of Otago Dunedin, New Zealand August 2013
Outline Introduction to the Australian National Electricity Market Key NEM developments and trends Where next for the NEM? Integrating renewables into the NEM
Large-scale wind Distributed (residential) PV
100% Renewables scenarios for the NEM Concluding thoughts
2 Renewables in Australia
3
Australian NEM
QLD: Av. load 5600MW Gen Capacity 12,000MW
NSW: Av. load 8500MW Gen Capacity 16,000MW
VIC: Av. load 5700MW Gen Capacity 11,000MW
SA: Av. load 1500MW Gen Capacity 4000MW
TAS: Av. load 1200MW Gen Capacity 3000MW
(AEMO, www.aemo.com.au, 2011)
(AER, 2012)
Renewables in Australia
(Australian Energy White Paper, 2012) (AER, State of the energy market, 2012)
4 Renewables in Australia 4
NEM institutional, market arrangements
Generation Sector:- large generators
Transmission Sector: TNSPS
Electricity flow
Derivative trading for risk, investment
Distribution Sector: - DNSPS
Electricity flow
Multi-region five-minute energy & FCAS markets
Intentions, offers & payments
Intentions, bids & payments
Retailer Z
Retailer 1
Retail sector
End-use Sector:- end-use equipment
Electricity flow
End-users
Retail Markets
Generation Sector
AEMO: market & system operator
cash flow
10%
50%
40% 40% Generator Y
Generator 1
(adapted from Outhred, 2007)
Recent trends
Falling demand, stabilising demand growth Investment shifting to gas and renewables Falling emissions, emissions intensity Falling wholesale prices, until the carbon price Significantly increasing retail prices Wind and PV
6 Renewables in Australia
Renewables in Australia 7
(AER, State of the energy market, 2012)
(BREE, 2012)
NEM investment moved markedly to gas, wind
8 Renewables in Australia
(Australian Energy White Paper, 2012)
NEM generation trends following
9 Renewables in Australia
(Pitt&Sherry, 2013)
(ClimateWorks, 2013)
10 Renewables in Australia
(AER, State of the energy market, 2012)
Retail price increases locked in.. with more to come?
11 Renewables in Australia (AER, State of the Energy Market, 2012)
(Productivity Commission, 2012)
Affordability is always key, hence prices matter
physical infrastructure
13 Renewables in Australia
(ESAA, Submission to AEMC DSP Issues Paper, 2011)
Australian wind market
14 Renewables in Australia
(Clean Energy Council, 2013)
Australian PV Market (APVA, 2012)
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cum
ulat
ive
kW
off-grid domestic off-grid non-domestic grid-connected distributed grid-connected power stations
Renewables in Australia 15
Current PV
Renewables in Australia 16
(Clean Energy Regulator, 2013)
What happens next?
Back to the future? Trend as destiny? If you follow forecasts? If politics is the key? If you listen to the market? If policy is your guide? If you think climate change needs to be addressed?
17 Renewables in Australia
History repeats? Trends away from underlying developments may be short-lived and will see reversion to mean given time Evident recent shift to gas and renewable generation in NEM might be slowed, stopped or even reversed
Increasing gas prices with LNG exports from East Coast from 2015 Repeal of carbon pricing? Reduction in Renewable Energy Target? Moves to restrict deployment of residential PV?
19 Renewables in Australia
20 Renewables in Australia
(ClimateWorks, 2013)
If following forecasts? Then take care eg. 2010 demand forecast
21 Renewables in Australia
(AEMO ESOO, 2010)
22 Renewables in Australia
(AEMO ESOO, 2011)
23 Renewables in Australia
(AEMO ESOO, 2012)