AEMC Annual market performance review 2018 – Identifies the challenges of transitioning to renewable energy.

5th April, 2019

Australia is currently transitioning to renewable energy, with a future promise of lower costs and emissions for energy consumers. The AEMC Annual market performance review 2018 published on Tuesday identifies the challenges presented by this transition. It provides a review of how the energy market is performing in terms of security, reliability and safety.

The report identified trends which are associated with the transition to renewable energy. One of the main points AEMC makes is that there was an increase in AEMO interventions required to maintain grid stability in the 2017/2018 period. “The grid is holding up but only because the energy market operator is intervening on a daily basis to keep the lights on”. This is wording which the media has taken advantage of to raise concerns about the amount of solar and wind entering the grid.

The NEM met its reliability standard for 2017/18, but the report focuses on the cost of this reliability. Schemes such as the RERT are being activated to maintain reliability. Consumers bore a cost of $51.99 million in 2017/18 for the activation of the RERT scheme.

AEMC also points out that system strength interventions in South Australia cost approximately $34 million per annum. AEMC is urging more efficient and lower cost solutions for the integration of renewable energy. For example, four synchronous generators are being installed in South Australia which should reduce the dependence on gas powered generation to increase system strength.

There is strong growth in behind the meter solar PV installation which is reducing demand but presenting its own challenges such voltage and frequency control issues.

Right now, it’s most important for industry, regulators, governments and consumer representatives to work together to fully understand the implications of the generation transformation.