Australian Grid Sees Lower Risk of Power Crunch in Next Decade

(Bloomberg) -- The risk of power shortages in Australia’s main grid over the next decade has shrunk as clean power generation continues to increase. 

Renewables are supplying 40% of the electricity into homes and businesses on the east coast, and planned projects have increased the reliability outlook since last year, the Australian Energy Market Operator said Thursday in its Electricity Statement of Opportunities report. The extension of a major coal plant has contributed to that, it said. 

“Investments in renewable generation and storage continue to increase, and the pipeline of new projects continues to expand, filling the gaps being left by the retirement of Australia’s aging coal fired power stations,” AEMO Chief Executive Officer Daniel Westerman said. “If delays occur to projects already underway or further investment does not materialize, then the outlook for reliability will deteriorate.”

Australia is in the midst of one of the world’s most rapid shifts away from coal — which still generates almost half of its electricity — to a renewables-dominated grid. In May, Origin Energy Ltd. agreed to delay the closure of the nation’s largest coal plant by two years, helping ease concerns of a repeat of periods of extreme supply tightness that culminated in the unprecedented collapse of power trading in 2022. 

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