Aussies warned of ‘real, growing risk’ of power generation falling short with 90 per cent of coal-powered plants to close within a decade

Australia's energy transition is urgent and faces significant risks if red tape, community uncertainty and supply chain issues are not resolved, officials have warned.

Investments are urgently needed to support new sources of affordable electricity over the next decade, when 90 percent of coal-fired generation will cease.

The latest modeling, released on Friday by the Australian Energy Market Operator (AEMO), shows coal-fired power stations are closing earlier than planned and people are getting electricity to their homes more quickly.

Upgraded energy systems will sometimes be able to run entirely on renewable energy, depending on system planning.

But businesses and industry are expected to need more, not less, energy as they double their grid electricity consumption in a growing, low-carbon economy.

Under AEMO's most likely 'step change' scenario, the annualized capital cost of all generation, storage, reinforcement and transmission infrastructure has a present value of $121 billion.

But the models estimate it could save consumers $17 billion in additional costs over time.

An Integrated System Plan (ISP) is drawn up every two years and the latest draft, due to be completed next year, reflects a change in the federal government and a slew of announcements about rewiring the nation and support for new energy sources.

But there are fears Australia is falling behind in the required investment, hampered by red tape, community uncertainty and fierce competition for equipment and workers, amid a global push to replace fossil fuel-fired networks.

Demand for workers in the energy sector is expected to grow from 40,000 people in 2023 to a peak of more than 70,000 in 2050. These workers are needed in all disciplines, not just engineering.

The possibility that replacement generation will not be available when coal-fired power stations retire is “real and growing, and a risk that should be avoided,” the AEMO report said.

Electricity remains the largest source of Australia's greenhouse gases, so moving from a coal-fired network to a system dominated by renewables is intended to do the heavy lifting on national emissions reduction targets.

The sooner renewable energy sources and energy storage are connected, the safer the energy transition will be, officials noted.

AEMO reiterated that the 'least cost' mix consists of renewable energy, connected by transmission, supported by batteries and hydropower, and supported by high-speed gas generation.

Daniel Westerman says a plan highlights the urgency to ensure safe, reliable and affordable energy. (Dean Lewins/AAP PHOTOS)

CEO Daniel Westerman said the draft 2024 plan highlights the “urgency of investment” to ensure Australians have access to safe, reliable and affordable energy.

“Gaining the trust of regional and rural communities is essential to avoid the risk of vital infrastructure not being built before coal-fired power stations close,” he said.

“While progress is being made, the transition is urgent and carries significant risks if market and policy institutions, social licensing and supply chain issues are not addressed.”

He said the plan shows a need for 5,000 kilometers of transmission, triple renewable generation and double dispatchable storage, and hydro and gas generation within the next decade.

By 2050, almost 10,000 km of new and improved transmission will be needed, a quarter of which is underway and half will be built in the next ten years.

A tripling of grid-scale variable renewable generation is needed by 2030 (57 gigawatts) and a sevenfold increase by 2050 (126 GW).

By 2050, almost four times the reinforcement capacity from interruptible storage, hydropower and gas generation must be added (74 GW).

Rooftop solar, batteries and electric vehicles also play a role in supporting energy reliability and a two-way flow of energy.

A fourfold increase in rooftop solar capacity by 2050 (72 GW) will require smart meters and other technology to deliver the most value and control for consumers and market operators.

Public submissions on the 2024 ISP draft are due by February 16 and the plan is due to be finalized by June 2024.