An alarm bell for electricity supply shortfalls this summer
31 Aug 2023|
The warning bell has today been sounded on the risks facing Australia’s energy market transition.
“We are walking blindly into an energy crisis of our own making,” ACCI chief executive officer Andrew McKellar said.
Despite a substantial increase (3.4 GW) in new electricity generation capacity being added in 2023, electricity supply shortfalls are likely in Victoria and South Australia over the coming summer. These risks of shortfalls will intensify later in the decade, affecting all states in the National Electricity Market.
Forecasts of a hotter drier summer will place increased pressure on electricity demand this summer, with existing sources of supply are shrinking.
More than 60 per cent of coal generation capacity will be retired by 2033 and the remaining coal-fired power stations are becoming increasingly unreliability, with little incentive to keep maintaining them.
“The electricity network is looking increasingly vulnerable. It is clear investment is not keeping up with the closure of coal-fired power stations and increasing demand,” Mr McKellar said.
Energy Minister Chris Bowen has noted the importance of government policies including the Rewiring the Nation and Capacity Investment Scheme to address many of the risks identified in the Australian Energy Market Operator’s Electricity Statement of Opportunities.
“We are walking a fine line, with delays in major projects making the electricity network even more vulnerable,” Mr McKellar said.
“The report highlights the need for a more coordinated approach to the energy transition. We can’t afford to continue to bring forward the closure of coal-fired power stations and gas power generators until we have developed the new renewable energy infrastructure to replace it.
“With the stability of the electricity network under threat, businesses will be bracing for higher electricity prices and disruptions to energy supply this summer.”