Clean energy transition delays threaten power stability

Kat Wong and Samantha Lock |

A lack of high-voltage power lines to connect wind and solar to major cities has slowed Australia’s clean energy rollout, putting homes at risk of blackouts and supply shortfalls as coal-fired power plants close.

With 62 per cent of Australia’s coal stations to shut within 10 years, the Australian Energy Market Operator (AEMO) warns reliability of the grid will be jeopardised.

Updated findings released on Tuesday forecast reliability gaps for NSW, Queensland, South Australia and Victoria.

the Yallourn Power Station in Yallourn
Most of Australia’s coal-fired power stations are due to close within 10 years. (Diego Fedele/AAP PHOTOS)

Delays to battery projects mean energy reliability will become riskier in NSW from the summer of 2024 to 2028 and mothballed generators have increased reliability risks in Victoria until 2028.

Delays to another transmission line project in South Australia will cause its energy supply to be less reliable in 2026.

In rare, extreme situations like high-demand summer days during coal-fired generator outages when there is no wind, wholesale electricity prices could therefore increase and blackouts and power outages would be possible.

The likelihood of such incidents being reduced can be managed by transmitting energy from other states or tapping into off-market reserves to match supply with demand.

But this is a short-term solution.

A residential power meter
During high demand electricity prices could increase and blackouts are also possible. (Jono Searle/AAP PHOTOS)

AEMO chief executive Daniel Westerman says governments must make urgent investments if Australia is to address long-term reliability risks.

“Australia’s energy transition is well underway,” he said.

“Project development and commissioning delays are impacting reliability throughout the horizon.”

The operator called for further investment in generation and transmission projects, as well as optimising consumer energy resources like rooftop solar.

Prime Minister Anthony Albanese talked down the warnings, saying his government was working to ensure reliability in the grid before attacking a coalition proposal for the roll-out of small modular nuclear reactors.

“What we know is (they are) up to six times more costly than renewable energy,” he told reporters.

“That’s not a plan, that’s a disaster.”

a residential rooftop solar unit
There needs to be more investment in rooftop solar to complement other renewable energy sources. (Lukas Coch/AAP PHOTOS)

Energy Minister Chris Bowen echoed that analysis, describing nuclear power as a pipe dream and a “recipe for reliability disaster”.

“It would be 2040 at lightning speed before we would see any nuclear power in Australia, likely later than that … and it’s the most expensive form of power,” he told ABC radio.

Opposition Leader Peter Dutton hit back, accusing Labor of “sleep walking towards an energy crisis”.

“While the battle on energy and how best to transition to net zero continues, most Australians just want a guarantee the lights are going to stay on,” he said.

Battery projects designed to replace NSW’s Eraring power station will take longer than expected to come online, increasing pressure on the state to extend the life of Australia’s largest coal-fired power station.

Origin Energy has been in talks with the NSW government about keeping the power station open beyond its planned closure in August 2025.

A recent review warned of electricity shortfalls and price spikes if Eraring closes as scheduled with ministers working on a safety-net solution to head off the threat of blackouts.

Origin Energy sign
Origin Energy is consulting the NSW government about keeping Eraring open beyond August 2025. (Joel Carrett/AAP PHOTOS)

NSW Premier Chris Minns said his state was focused on keeping the lights on and power prices down as talks continued with Origin about Eraring.

“We’ll keep everything on the table to ensure consumers aren’t having to face massive increases in power prices,” he said.

Nothing would kill community support for a transition to renewable energy like a large spike in power bills, Mr Minns said.

Nexa Advisory chief executive and former AGL Energy public policy director Stephanie Bashir noted the AEMO modelling was based on conservative assumptions and its report made no direct mention of blackouts.

“In fact, the gap identified each year in the sensitivity analysis under worst case scenario is still fairly small and can be filled with big batteries similar to the Waratah Super Battery and demand side flexibility,” she said.