AEMO flags ‘recent challenges with fuel availability with potential ongoing implications for reliability in the NEM this winter’

Worth a brief article to highlight what the AEMO published at 14:17 today as Market Notice 96853…


(A)  The AEMO Market Notice, and concerns for winter 2022

Obviously, this Market Notice speaks to immediate concerns about what’s unfolding in this ‘2022 Energy Crisis’ … and in particular what it means for winter 2022:


From :              AEMO
To   :              NEMITWEB1
Creation Date :     07/06/2022     14:17:05


Notice ID               :         96853
Notice Type ID          :         GENERAL NOTICE
Notice Type Description :         Subjects not covered in specific notices
Issue Date              :         07/06/2022
External Reference      :         Energy Limits in MT PASA submissions


Reason :

AEMO notes recent challenges with fuel availability with potential ongoing implications for reliability in the NEM this winter.

AEMO runs the Medium Term Projected Assessment of System Adequacy (MTPASA) process weekly to forecast expected unserved energy levels over a two year period. If the expected annual unserved energy exceeds the maximum level specified by the Reliability Standard, a Low Reserve Condition is identified. MTPASA relies on information from market participants reflecting up to date intentions and estimates of availability and energy constraints over the two year period.

AEMO requests market generators to review their MTPASA weekly energy constraints submitted under National Electricity Rules, and if necessary submit updates as soon as possible, taking into account all relevant circumstances including:

– The potential for fuel stockpiles or water storages to fluctuate in the short term.
– The generator’s capability to replenish stockpiles or storages is depletion occurs.
–  Any other limits on the ability of the unit to operate continuously at its declared availability.

AEMO System Design


As such, we’ll be taking a keen interest in what might change, as a result of this request from the AEMO … and also what unfolds through the rest of winter 2022.


(B)  Broader and Longer-Lasting implications

However this also reinforces questions we have already asked about the longer term …

In GenInsights21 we included some questions about the implications of what we framed as ‘The rise of Just-in-Time’ (as Key Observation #5 (of 22) in Part 2 of Volume 1).  That was written with reference to a significant move away from having large volumes of energy stored ‘onsite’ ready for conversion to electrical energy that seems to be an implied part of this energy transition.

Part of the reason to flag this in GenInsights21 was to highlight the cognitive dissonance between:

Exhibit #1)  the enormous volumes of energy currently stored ‘on the ground’ in coal stockpiles, gas line-pack and hydro storages in NEM 1.0; and

Exhibit #2)  The insane level of discussion about whether the storage levels represented in Snowy 2.0* and the Tassie ‘Battery of the Nation’* are actually required under a NEM 2.0 scenario where the energy stored on the ground above is just not there in future…

*  note, this is not a comment on the merits of those two particular projects … but a specific comment about the insanity of dismissing the projects on the basis that the levels of storages proposed are ‘too big to be required’!

In Appendix 27 within Volume 2 of  GenInsights21 we created a hypothetical ‘Wind + Storage only’ grid and back-case over 15 years of weather history in order to highlight the scale of the numbers required to make such a thing work.  For those who want a small slice of what we did there, you might want to watch from the ~40 minute mark in this presentation about GenInsights21 to the Smart Energy Council audience.

With respect to this ‘2022 Energy Crisis’ I’ve seen/heard it  noted any number of times already something along the lines of ‘never waste a crisis’ (though that oftentimes is followed by someone talking their book about some pre-conceived perspective of the energy transition).  Whilst recognising (even highlighting!) the ‘talking the book’ nature of the comments, it’s worth flagging two articles in the AFR today:

Article #1)  In an opinion piece in the print run today, APA CEO Rob Wheals wrote ‘Four lessons from an energy crisis we could have avoided’; and

Article #2)  Referencing the same, the Chanticleer wrote ‘Energy shock can be the spark the country needs’, from which I’d highlight the following quote:

“We’re fortunate that if we react responsibly now, we can use this crisis,” he tells Chanticleer.

“We’ve actually got a bit of a window into what our electricity market looks like without a third of capacity during the winter. That’s exactly what we’ve got right now – and we’ve seen the mess.

Now whilst highlighting the ‘talking the book’ aspect of the comments, it’s important that readers don’t fall into the opposite trap … of dismissing what all of Rob says just because he’s talking pro gas and works for a gas company.

What an ‘interesting’ time for the new Federal Government to come to power, in that:

Perspective #1)  Not only does it have to somehow work with all stakeholders to navigate through the immediate challenges of this ‘2022 Energy Crisis’; but

Perspective #2)  It can, and should, be ‘using’ this crisis as a catalyst to thinking deeply about how the energy sector (broader than just the NEM) can continue to operate in the decades ahead as we move to an increasingly ‘Just-in-Time’ arrangement.

I chose not to attend ‘Energy Week’(currently on in Melbourne) … but let’s hope that the audience there might be making some progress in considering these types of longer-term challenges, as well!

Hold onto your hats …. both:

1)  In relation to winter 2022; and

2)  In relation to this broader energy transition.

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

2 Comments on "AEMO flags ‘recent challenges with fuel availability with potential ongoing implications for reliability in the NEM this winter’"

  1. I think the overwhelmingly obvious thing the current situatio illustrates is that you have to build new capacity for energy and power before the old stuff goes out of service.

    To me it is incredible that Frank Calabria is talking about restoring coal supply and is closing a generatorbut is not contracting or building any new wind or solar even though every model shows that lots more of it is needed. What does he think, someone is going to give hime 5 or 6 GW of wind or solar the day Eraring closes so he can keep his retail customer loads? The same for AGL and EA with Yallourn.

    As you can see it makes me grumpy.

  2. Nobody with any honest insights believes The Transition (to replace coal with wind and solar) is realistic – either in the realm of physics or economics.

    The faint technical possibility of a very high % RE system is dwarfed by the massive cost and the impracticalities of storage, transmission, inertia, fault level, over supply, negative wholesale prices, land use – just one of those challenges is a spanner in the works. Combined they are insurmountable.

    At what point does the community of energy professionals decide to speak up and tell the truth?

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