Healthy pipeline, now for delivery


Hey Reader, in today's edition:

  • ESOO warns of schedule imperative
  • New rule flagged for RRO
  • Extension for AGL's Torrens Island B

Reliability rests on on-time delivery: AEMO

The 10-year outlook from the Australian Energy Market Operator (AEMO), out today, warns timely development is needed for a reliable post-coal electricity system, with consumption tipped to boom amid business electrification, a greater industrial load and the rapid expansion of data centres.

Officials forecast a pick up in the pace of generator commissioning, from 4.4GW in 2024-25 to an expected 5.2GW to 10.1GW a year over the next five years. This new capacity will help to offset the notified retirement of 11GW of predominantly coal-fired power stations over the next 10 years, including Eraring, Bayswater and Vales Point in NSW, Yallourn in Victoria and Callide B in Queensland.

“The 10-year investment pipeline to manage energy reliability is healthy,” AEMO CEO Daniel Westerman said.

But while the pace of generation and energy storage investment is on the rise, avoiding delays in bringing the right mix of generation, storage, transmission and consumer energy resources (CER) into the system will be essential, the 2025 Electricity Statement of Opportunities (ESOO) warns.

Further, maximum operational demand is projected to grow at a faster rate while minimum operational demand will continue to decline on continued uptake of distributed PV systems, reinforcing ongoing security and stability challenges.

“Over the near term, on-time and in-full delivery of committed, anticipated and federal and state government-supported generation projects, as well as actionable transmission developments and the coordination of embedded consumer resources, is critical for reliability … Additional investments in security and stability services and implementation of the National CER Roadmap are required to enable a reliable and secure power system.”
2025 Electricity Statement of Opportunities

Two development outlooks - “Government Schemes and Actionable Developments” and a “Committed and Anticipated Developments” reliability assessment - identify investment needs to both replace retiring assets and meet forecast demand growth.

Following the initial years of the 10-year outlook, reliability gaps are forecast in all mainland NEM regions, but they have the potential to be managed as further projects progress towards meeting AEMO’s commitment criteria.

Over the coming five years, reliability risks are primarily triggered by large power station exits and there’s a clear warning of the imperative this creates for replacement energy generation and storage:

  • A relatively small 80MW reliability gap in Queensland in the summer 2025-26 on reduced generator availability, higher forecasts of maximum demand, and slower commissioning of projects than previously advised
  • Forecast risks in South Australia continue to come in above the reliability standard, resulting in a 390MW reliability gap in 2026-27 when Torrens Island B is currently advised to retire and with the transmission interconnector Project EnergyConnect not expected to be fully commissioned
  • However, AGL Energy has struck an in-principle agreement with the SA government to extend the operation of Torrens Island B for two years and which the ESOO says would eliminate reliability gaps in these years if the extension is formalised
  • Reliability gaps previously triggered by the retirement of Eraring in NSW in 2027-28 are no longer forecast, with enough instantaneous energy production capacity, but system security and operability challenges remain
  • Reliability gaps previously identified on advised retirement of Yallourn Power Station in Victoria in 2028-29 are no longer forecast, with development now “likely sufficient” to provide for reliability in this year
  • System security challenges in Victoria following the Yallourn retirement are still being assessed, while operability challenges are forecast, including potential challenges scheduling planned outages and managing potential gas shortfalls.

More immediately, as part of AEMO’s summer preparations, it has a panel of providers to procure additional reserves when reliability is at risk across the NEM.

Other actionable insights include AEMO saying it would request the Australian Energy Regulator consider an obligation on retailers and liable entities to enter sufficient contracts through the retailer reliability obligation (RRO) for the state in 2026-27.

An updated system security analysis will be published by AEMO in December.

Catch Up

Capital

Australia’s biggest gas pipeline company APA Group reported a 6.4% rise in core earnings to $2.015 billion for FY25, supported by higher earnings from the Victorian Transmission System and Moomba Sydney Pipeline, and forecast stronger growth. (AFR)

“We are confident in the long-term critical role gas will play across Australia. Our East Coast Gas Grid Expansion Plan, early works in the Beetaloo, opportunities in gas-powered generation and ongoing growth in remote power generation in the Pilbara, demonstrate how we expect our core business will underpin our growth for years to come.”
Adam Watson
APA CEO

The Tasmanian government approved a secured loan of up to $20 million to Liberty Bell Bay, a major regional employer and energy user. (Pulse Tasmania)

“Let me be clear. This support is for Tasmanian workers and their families, not for the GFG Group. It is now time for GFG to step up and provide certainty for its workers by committing to do whatever it can to see the smelter continue to operate, including through investing in the operations.”
Felix Ellis
Minister for Business, Industry and Resources

CIMIC Group’s subsidiary UGL was awarded a three-year contract extension to 2029 by Queensland government-owned Stanwell Corporation to support the Stanwell, Tarong, and Tarong North Power Stations that feed into the NEM.

Iluka Resources’ $1.7 billion taxpayer-backed Eneabba rare earths refinery would thrive on the price floor set by the Trump Administration for two key rare earth elements, CEO Tom O’Leary said, posting an H1 fall in profit from minerals sands. (The West) (Discovery)


Projects

The $40 billion SunCable project could pivot to onshore data centres as Labor ramps up its AI pitch. (Capital Brief)

Bosses from BHP (ASX: BHP) and Rio Tinto (ASX: Rio) met with US President Donald Trump to try to overturn a setback from the “radical left” after a federal appeals court temporarily halted a land transfer that would allow the Resolution Copper mine to destroy Western Apache sacred land in Arizona. (The West) (Inside Climate News)

The federal government allocated $2.5 million from the $200 million community batteries program to Western Power to develop community batteries in Coogee, Kinross, Bayswater, Stratton and Port Kennedy. At a combined 500kW/2.8MWh, the five new projects across Perth are designed to harness excess generation from rooftop solar, cut power bills and emissions, and improve local power reliability. Connected households can save up to $132 annually, together with a 4kWh off-peak offset under a retail subscription product being developed by gas and electricity retailer Synergy for release later in the year.

“Our City began harnessing the sun’s power in 2009 and has the largest inventory of solar PV systems of any Local Government in WA. We have now installed more than 5,700 photovoltaic panels on 22 community buildings, producing clean energy and reducing greenhouse gas emissions in our community.
This community battery will enable more people to install rooftop solar by helping manage network constraints. They also provide access to renewable energy for those who cannot install solar panels, contributing to lower greenhouse gas emissions.”
Logan Howlett
City of Cockburn Mayor

Policy

Environmental law reform was a key agenda item at the Productivity Roundtable in Canberra. Outside, Greens spokesperson for the Environment Senator Sarah Hanson-Young said Australia’s “Howard era” environmental laws aren’t working for anyone except fossil fuel companies that continue to block any changes. Meanwhile the Labor Party’s grassroots policy advocates insist there must be no free pass for clean energy.

“No exemptions. Forestry, agriculture and renewables must not be carved out from the laws … Business is understandably calling for more efficient and streamlined processes. But efficiency and speed must not come at the cost of the environment.”
Louise Crawford
Labor Environment Action Network (LEAN) campaigner

Economists and industry experts convened on Sky News for a so-called Real Economic Round Table, to “fill the void of Labor’s productivity summit flop”. It was hosted by Nationals Senator Matt Canavan who said no one at “groupthink central” was discussing the fact that energy prices were the biggest hit to the nation's productivity, wealth and prosperity.

Woodside Energy (ASX: WDS) chief executive Meg O’Neill said earlier in the week the extension of the North West Shelf project was a good test case for productivity, suggesting the conditions the federal government wanted to impose were not technically feasible and also contradicted the push to improve economic resilience. (AFR)

The Trump administration set out a new schedule running out to 2040 for offshore oil and gas lease sales in the Gulf of Mexico and Alaska’s Cook Inlet.


Technology

A virtual power plant test involving 100,000 residential batteries in California found the resulting 539-megawatt dispatch helped serve the system’s net peak and relieved strain during the evening load ramp. (Latitude Media)


Climate

Companies should be required to reinvest diesel fuel tax credits (FTC) above a $50 million annual cap into clean alternatives or forgo these credits, independent think tank Climate Energy Finance (CEF) suggested. A CEF report on the existing scheme found the tax break was entrenching dependence on imported high-emissions diesel to power mining operations, undermining climate targets, productivity and syphoning tens of billions from the federal budget. In FY24 alone, the top 15 diesel users – iron ore majors Fortescue (ASX: FMG), BHP, Rio Tinto, and Hancock Prospecting and coal miners Glencore (LON: GLEN), Peabody Energy (NYSE: BTU), Yancoal (ASX: YAL), Mitsubishi’s subsidiary, Whitehaven (ASX: WHC) and Anglo American (LON: AAL) – collected $2.9 billion in FTC subsidies, CEF said.

"Right now, there’s a significant gap between the cost of putting carbon into the atmosphere and the reward companies get for using diesel. Under the Safeguard Mechanism, an ACCU costs around $37 a tonne, but the diesel rebate is worth the equivalent of about $191 a tonne. That’s a five-times incentive to keep burning diesel.”
Dino Otranto
Fortescue Metals and Operations CEO

Research

RMIT University researchers found disconnections for non-payment of electricity bills can be stopped without significantly destabilising the market. The research funded by Energy Consumers Australia scanned Spain, France and Ireland for policy options. For example: the electricity costs of Spain’s most vulnerable customers are shared equally by retailers and local governments; households in France and Ireland can not be disconnected during the winter months; and the supply to households can be reduced in France and Spain so essential household services can be maintained.

“Energy disconnections mean more than sitting in the dark - they amplify stress, risk health problems and can deepen financial hardships. By looking to international models, Australia can further refine its policies to protect consumers more effectively. And given the depth of harm caused by disconnections, we really should be considering other options.”
Dr Nicola Willand
Lead researcher

Why wind farms attract so much misinformation and conspiracy theory. (The Conversation)

What's On

August 21
NEM Review Draft Report - Derivative Markets

This is a second in a series of online forums with the Panel undertaking the National Electricity Market wholesale market settings review.


August 26
NEM Review Draft Report - Long Term Incentives

This is the third in a series of online forums with the Panel undertaking the National Electricity Market wholesale market settings review.


August 26-27
Australian Renewable Heat Conference

Climate Change Authority Chair Matt Kean, ARENA investment manager Peter Haenke, and AGL sustainability expert Brendan Weinert will speak at this event in Sydney.


August 26-28
2025 New Zealand Wind Energy Summit

NZ Minister of Energy Simon Watts, Secretary-General of the World Wind Energy Association Stefan Gsänger, Global Wind Energy Council CEO Ben Backwell, Commerce Commission Chair Dr John Small, and Transpower Executive General Manager - Future Grid John Clarke headline this event in Wellington, NZ.


September 1-3
Farming Forever National Summit

Farmers for Climate Action CEO Natalie Collard, Rewiring Aeteroa CEO Mike Casey, NSW EnergyCo Chair Paul Binsted, ANU Director of the Institute for Climate, Energy & Disaster Solutions Professor Mark Howden and NAB Chief Climate Officer Jacqui Fox will speak at this Farmers for Climate Action event in Canberra.


September 2
Bias in action

ANU Institute for Infrastructure in Society Director Sara Bice, CEO of The Energy Charter Sabiene Heindl, Director of Partnerships and Engagement at Energy Estate Rosie King, and Head of Communications and Stakeholder Engagement at Ark Energy Melissa Pisani will speak at this renewable energy engagement webinar.


September 2-4
14th World Chambers Congress

OECD Secretary-General Mathias Cormann, CEFC Chair Steven Skala and Yurringa Energy CEO Arron Wood are among the speakers at this Melbourne event.


September 16
The Price of Power: The Future of Australia's Energy Sector

Bluescope Chief Executive, Climate Change and Sustainability Deborah Caudle, Alinta Energy CEO Jeff Dimery, AGL CEO Damien Nicks and Australian Energy Council CEO Louisa Kinnear will speak at this American Chamber of Commerce event in Melbourne, with R. Blair Thomas, CEO of US energy investment firm EIG speaking via Zoom.

The Energy

The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.

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