Skip to content

Market operator develops road to renewables

Just a week after reporting on a slowing of renewable energy projects to an all-time low, this week the Australia Energy Market Operator (AEMO) has published the engineering roadmap that is required to get the NEM to 100% renewables. While the roadmap doesn’t guarantee the NEM will be powered by renewables 24 hours a day all year round, the roadmap is designed to allow the NEM to be powered by renewables for hours or days at a time.

The roadmap to 100% renewables raises new challenges including the variability of output from wind and solar generation and the change required to these technologies to work with a system designed for one-way electricity flow from large synchronous generators to firm the transition away from coal-fired generators.

For years the market has seen the potential for high levels of renewables to cause system problems, this is due to the variability of output causing large swings in spot prices and lower system strength leading to a less stable network.

South Australia is a world leader in renewable energy generation, and in order to maintain system security they use synchronous condensers which maintain inertia and in doing so improves system strength, allowing for higher levels of wind and solar to operate. The transition may require more synchronous condensers to maintain system security, however newer installations are integrating these technologies to provide a similar service which may mitigate the demand.

In addition, high levels of renewable energy puts pressure on coal generators. Forcing coal-fired generators to run at minimum load while they wait for anticipated higher prices over the evening and into the night. However, the longer the spot price remains lower during the day, coal-fired generators will need higher evening spot prices to break even. At some point, the economics will not add up, and the coal-fired units will be mothballed or permanently retired. The shutting down of coal-fired generators will require large amounts of storage for countries to achieve their renewable energy targets of 83% by 2030.

While coal-fired generation is the big loser in the new world, 100% renewables combined with storage will put a lower reliance on gas-fired generation for firming or covering the peak electricity needs during the day.

If you would like a strategy to ensure your company procures energy to support sustainability and growth in renewables  please reach out to discuss your options.  To save on electricity spend, you can also join our Edge Utilities Power Portfolio, read more: or call us on: 1800 334 336 to discuss.