Renewables in the Australian National Electricity Market current … · 2013. 8. 5. · Integrating renewables into the NEM ±Large-scale wind ± ... markets Intentions, offers &

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)

http://www.aemo.com.au/

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


Renewables in Australia 7

(AER, State of the energy market, 2012)

(BREE, 2012)

NEM investment moved markedly to gas, wind


(Australian Energy White Paper, 2012)

NEM generation trends following


(Pitt&Sherry, 2013)

(ClimateWorks, 2013)


(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


(ESAA, Submission to AEMC DSP Issues Paper, 2011)

Australian wind market


(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


Current PV


(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?


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?



(ClimateWorks, 2013)

If following forecasts? Then take care eg. 2010 demand forecast


(AEMO ESOO, 2010)


(AEMO ESOO, 2011)


(AEMO ESOO, 2012)

Renewables in the Australian National Electricity Market current … · 2013. 8. 5. · Integrating renewables into the NEM ±Large-scale wind ± ... markets Intentions, offers &

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