Solar PV to meet 77% of Australian states’ power needs by 2026

Commercial and residential solar photovoltaic (PV) generation could meet as much as 77% of electricity demand in four of the five most populous mainland Australian states by 2026, according to an outlook released 31 August by the Australian Energy Market Operator (AEMO). The climb in the generation share significantly surpassed prior expectations, it added.

As a result, support systems for the coming buildout of the country's solar PV generation capacity, and its nascent offshore wind infrastructure, are rapidly being created to pave the pathway Prime Minister Scott Morrison's government has chosen for cutting Australia's carbon footprint.

Rooftop solar already accounts for the largest slice of the generation pie in the National Energy Market (NEM), AEMO said in its annual Electricity Statement of Opportunities, the 10-year outlook. It added that continued investment in residential rooftop solar PV is at times challenging AEMO's ability to provide secure and reliable electricity.

"By 2025, there will be periods of time when all customer demand could be met by renewable generation. This underscores AEMO's priority to develop grids that are capable of running at up to 100% instantaneous renewable penetration by 2025 to deliver reliable and affordable energy to consumers. We aim to do this in close collaboration with industry, consumers, market bodies, and governments," AEMO CEO Daniel Westerman said in a statement accompanying the release of the outlook.

"As the energy transition accelerates, the decarbonization of other sectors also needs careful planning of their interface with the energy system," Westerman said, adding that this will require the right incentives, policies, technologies, and building a social license with consumers.

The AEMO expects a further 8.9 GW of commercial and residential solar PV to be installed by 2025 in the mainland NEM states—Queensland, New South Wales, Victoria, and South Australia. Western Australia and the Northern Territory are not connected to the NEM.

The latest example of the growing buildout of Australian solar capacity came 30 August, as Amp Power Australia said the company and partner EPS Energy had inked a lease deal with the Barngarla Determination Aboriginal Corporation for their 388-MW Yoorndoo Ilga solar facility in South Australia. The facility is one of three Amp expects will form its Renewable Energy Hub of South Australia, which was announced in May. The Yoorndoo Ilga site will also have a 150-MW battery energy storage system.

Australian authorities want to make it easier for small-scale solar to connect to the grid and ease the transition away from a coal-heavy generation stack.

Some 16 GW of coal-fired generation (61% of the current coal fleet in the NEM) is expected to retire as over the next two decades, according to the Australian Energy Regulator (AER). Since 2014, more than 4 GW of coal- and natural gas-fired generation left the market, it added.

Despite the plant closures, coal-fired generation remains the dominant supply source in the NEM, meeting around 66% of energy requirements in 2020, the AER said. Utilization rates of some remaining coal plants have risen to cover the supply gap left by the closures, it added.

Solar connection reforms

The Australian Energy Market Commission (AEMC) said 12 August it had finalized reforms designed to feed more power from small-scale solar facilities into the grid and support the growth of batteries and electric vehicles.

The reforms include transmission network businesses being obliged to support energy flowing both ways; network companies being allowed to offer a range of options—including a basic free service—to encourage solar owners to limit solar waste, save money, and benefit the grid; and no new pricing plans for existing customers being introduced before July 2025, in order to give customers more certainty.

A key part of the changes is removing the companies' ability to put blanket bans on customers sending solar energy back to the grid, the AEMC said.

"These new measures to drive smart solar are fundamental to enabling a modern electricity grid that delivers out to 2030 and beyond," AEMC Chair Anna Collyer said in a statement accompanying the delayed release of the reforms.

"They represent a profound change to the way poles and wires businesses must think about how they manage their network and turn the current one-way street delivering power to people's homes into two-way super-highway where energy flows in both directions," she added.

The reforms would remove blockages for renewable energy joining the system, said Energy Security Board Chair Kerry Schott.

Australia saw 7 GW of renewable energy capacity additions in 2020, the country's highest single year of newbuild and nearly 40% higher than 2019's total, as well as exceeding government projections of 6.3 GW for the year, the country's Clean Energy Regulator said in March. David Parker, Clean Energy Regulator chair, expects Australia to add more than 6 GW of renewable capacity in each of 2021 and 2022.

The AER said in its State of the Energy Market 2021 report released 2 July that over the next two decades, 26-50 GW of new large-scale wind and solar capacity is forecast to come online, along with 13-24 GW of rooftop solar PV. However, it warned, to balance this the NEM will need 6-19 GW of new utility-scale, flexible, and dispatchable resources by 2040—which should be read as coal or gas-fired capacity.

Such a large-scale expansion of capacity may be needed as electrification of the Australian economy accelerates (see graph below), AEMO said in its 10-year outlook.

Boost for offshore wind

To facilitate connecting offshore wind's contribution to those newbuild figures, on 2 September, the government introduced The Offshore Electricity Infrastructure Bill 2021, which will establish a framework for the construction, operation, maintenance, and decommissioning of offshore electricity projects.

"An offshore electricity industry in Australia will further strengthen our economy, create jobs and opportunities for Australians, and enhance the delivery of affordable and reliable power," Minister for Energy and Emissions Reduction Angus Taylor said in a statement announcing the bill's introduction in parliament.

"Offshore generation and transmission can deliver significant benefits to all Australians through a more secure and reliable electricity system, and create thousands of new jobs and business opportunities in regional Australia," he added.

Taylor said the bill would help projects already under development, including the Star of the South offshore wind farm off the coast of Gippsland, Victoria.

Under the legislation, the National Offshore Petroleum Titles Administrator (NOPTA) would oversee licenses for offshore projects, while the National Offshore Petroleum Safety and Environmental Management Authority would carry out oversight of ongoing operations and safety.

The developments come against a backdrop of modest GHG-reduction goals compared with other developed nations.

Markets and technology, in lieu of regulations or a carbon tax, will be Australia's climate solution, Morrison said 22 April the Leaders Summit on Climate organized by US President Joe Biden.

"Australia is on the pathway to net zero. Our goal is to get there as soon as we possibly can, through technology that enables and transforms our industries, not taxes that eliminate jobs," Morrison said. "For Australia, it is not a question of when or if we reach net zero, but importantly how. That is why we are investing in priority new technology solutions."

Australia's nationally determined contribution under the Paris Agreement, which was updated on 31 December 2020, is to reduce GHG emissions 26-28% below 2005 levels by 2030.

Emissions fall 5.3% on year

Australia's emissions are at their lowest level on record, according to the latest Quarterly Update of Australia's National Greenhouse Gas Inventory, released by the Department of Industry, Science, Energy and Resources 31 August.

Emissions in the year through 31 March 2021 totaled 494.2 million metric tons (mt), some 5.3% or 27.8 million mt lower than in the previous year, it said, adding that said 2021 level was 20.8% lower than in 2005—the baseline year for the Paris Agreement.

The results reflect continuing decreases in transportation emissions due to COVID-19 restrictions, reduced fugitive emissions, and ongoing reductions in emissions from electricity, the department said. These reductions were partially offset by increased emissions from the land and agriculture sectors.

Posted 02 September 2021 by Keiron Greenhalgh, Senior Editor