A report by WA’s independent energy market operator has highlighted the need for new investment to avoid a predicted shortfall in the sector’s capacity in 2025.
The Australian Energy Market Operator, which manages WA’s wholesale electricity market, has published its annual statement of opportunities.
It forecasts annual peak demand in the South West energy network to grow by an average of 0.9 per cent over the next 10 years.
One year ago, it was forecasting average annual peak demand growth of just 0.2 per cent.
AEMO attributed the revision to increased demand from large industrial loads, growth in new housing connections, and the uptake of electric vehicles.
The report sets the ‘reserve capacity requirement’ at 4,526 megawatts (MW) for 2024-25 – that is just 8 megawatts below the generating capacity of the South West Interconnected System.
That will be followed by a “shallow” shortfall of 21 MW from 2025-26 after the retirement of unit 6 at Collie’s Muja power station in October 2024 and as demand increases.
The report said the shortfall could potentially grow to 303 MW by 2031-32 if no new capacity was committed.
This forecast does not factor in this week’s announcement by the WA government regarding the closure of all coal-fired power units at Collie by 2029.
AEMO’s executive general manager WA and strategy, Kate Ryan said timely investment in new renewable capacity would enable the system to meet the increased demand.
“New, firmed renewable capacity, such as the WA government’s plan to invest in new wind generation and battery storage projects as it retires coal-fired power stations, can help alleviate any projected shortfalls as the future of WA’s power system takes shape towards 2030,” Ms Ryan said.
The report notes the rapid pace and scale of change in WA’s power system, led by the uptake of rooftop solar and other ‘distributed photovoltaic’ installations.
They are expected to grow at an average annual rate of 7 per cent, or 238 MW per year.
This would see distributed PV grow from 2,042 MW in March 2022 to an estimated 4,716 MW of installed capacity by 2031-32, equal to 29.8 per cent of underlying demand.
As a result, overall operational consumption is forecast to decline at an annual rate of 0.3 per cent over the outlook period.
That is substantially lower than the forecast decline of 0.8 per cent in the 2021 report.
The increased rollout of roopftop solar and other distributed PV is also leading to a big decline in the WA energy market’s minimum operational demand; i.e. the minimum demand for electricity from the grid.
This is expected to decline from the current record low of 765 MW to just 11 MW by 2026-27, if left unconstrained.
Ms Ryan said a range of measures have been introduced in recent years to maintain energy security during low demand conditions.
This includes measures known as fast frequency response and under-frequency load shedding.
“With renewables already providing up to 78.6 per cent of power generation at any one point of time in the SWIS, AEMO is making every effort to develop tools that will enable grids that could run at times of up to 100 per cent peaks of instantaneous renewable generation by 2025,” Ms Ryan said.
“As the energy transition in WA continues to accelerate, AEMO will keep working with the energy sector in WA and Australia to share our learnings and expertise.
“This will enable the transition to low-emissions energy whilst creating more opportunities for consumers to benefit from new, decentralised technologies like solar, batteries, and electric vehicles.”
