AEMO releases 2024 ESOO on Thursday 29th August 2024

It’s Thursday 29th August 2024, and the AEMO released its Electricity Statement of Opportunities (ESOO) for 2024.   This follows on from earlier issues:

(1)  Annual updates, in the years before, and then …

(2)  In 2021, the AEMO released the ESOO 2021 (on 31st August 2021) and also the ESOO 2021 Update (on 14th April 2022, in response to several significant developments after that time).

(3)  In 2022, the AEMO released the ESOO 2022 (on 31st August 2022) and also the ESOO 2022 Update (on 21st February 2023).

(4)  For 2023, the AEMO released the ESOO 2023 (on 31st August 2023) and also the ESOO 2023 Update (on 21st May 2024).

Readers here can access the report, and accompanying materials, as follows:

With respect to this release of the ESOO, readers might like to note the following:

(A)  What AEMO notes about the report

There’s a Media Release titled ‘Delivery of ongoing energy investments critical in the coming decade’ – in which the AEMO notes:

‘The report highlights that expected investments in new generation, storage and transmission must be
delivered on time and in full to maintain a reliable supply of electricity to homes and businesses.

This includes federal and state government schemes, supported generation projects, actionable
transmission developments, the coordination of consumer energy resources, and additional demand
flexibility.’

However, for me, the key takeaway is what’s noted in the Executive Summary – as follows:

‘The main findings of this 2024 ESOO are:

• If delivered on time and in full, then federal and state government programs providing additional renewable generation and dispatchable resources, actionable transmission developments, and coordination of forecast consumer energy resources (CER) would provide sufficient generation capacity to meet growing electricity demand within relevant reliability standards over most of the next 10 years. Timely delivery of these expected investments is critical.

• AEMO also considers a development outlook that includes only energy supply infrastructure developments that meet AEMO’s commitment criteria. If further investment beyond current committed and anticipated projects is delayed or does not materialise, AEMO forecasts reliability gaps will exist over the coming years in some NEM regions. These gaps are smaller than those forecast in the May 2024 Update to the 2023 ESOO and the 2023 ESOO. In this sensitivity, reliability risks are forecast higher than the relevant reliability standard3 in:

− Victoria from this coming summer, in 2027-28 and from 2028-29 after Yallourn Power Station is advised to retire.
− New South Wales this coming summer, again in 2027-28 when Eraring Power Station is now advised to retire, and from 2031-32.
− South Australia this coming summer, again in 2026-27 when Torrens Island B and Osborne Power Stations are advised to retire, and in 2033-34.

• AEMO will request the Australian Energy Regulator (AER) to put an obligation on retailers and liable entities to enter sufficient contracts to cover their customers peak demand needs, through the retailer reliability obligation. AEMO will also take prudent action and seek to procure additional reserves for the coming 2024-25 summer, safeguarding consumers in a cost-appropriate manner.

• Alongside energy-related investments that support reliability, investments are also required to ensure that the power system remains stable and resilient. As existing synchronous generators retire, there is a need for system strength services across the NEM and for urgent implementation of the recently published National CER Roadmap.’

So how readers interpret this might depend, at least in part, on whether seeing ‘glass half full’ or ‘glass half empty’.

(B)  What we have noted on WattClarity®, about the ESOO

Here on WattClarity®:

1)  Prior to the release of the ESOO we have posted:

(a)  At this point, worth reminding readers of the question ‘what is the purpose of the ESOO?’ we posed in GenInsights21;

(b)  A week ago today, Dan Lee wrote about ‘What the last twenty years of the ESOO tells us about blackout predictions’ … in terms of the report being a ‘blackout barometer’.

(c)  Following our recent release of the GenInsights Quarterly Updates for 2024 Q2, we shared three snippets – each of which included some questions about what we might hope to see in the ESOO:

i.  As the first excerpt, later in the day on Monday 26th August 2024 we wrote ‘Coal-fired unit performance has improved markedly from the ‘dog year’ that was 2022’

ii.  As the second excerpt, on Tuesday 27th August 2024 we wrote ‘(Update of) long-term trends of (the high points of) Aggregate Scheduled Target’.

iii.  As the third excerpt, on Wednesday 28th August 2024 we wrote ‘Are we *still* not building enough replacement Firming Capacity?’..

2)  Following the release of the ESOO we have posted:

(a)  This article, obviously

(b)  Later on Thursday we published ‘Once through the ESOO (for 2024)’ … and are progressively filling in the blanks with more detailed articles:

i.  First ‘What’s the 2024 ESOO assume, in terms of coal unit performance?’.

ii.  Then ‘AEMO calls for tenders for supply of RERT (in South Australia) for summer 2024-25’.

iii.  Plus more to come in the next day or two…

(C)  News Media commentary about the ESOO 2024

So far today I have come across commentary in a range of places, including the following:

1)  In the AFR we have seen…

(a)  Top of Front Page of the AFR, Angela MacDonald-Smith and Ben Potter write ‘Pressure on power grid eases as EV uptake falters’ – noting the online title is slightly different than shown here:

(b)  The next morning on p5 of the print edition we see Angela Macdonald Smith writing ‘Power market beginning to fail, energy users say’ – quoting Andrew Richards from the EUAA amongst others

… the EUAA’s statement is linked further below

(c)  Perhaps more?

2)  In the Australian we have seen …

(a)  Front Page we see Colin Packham that ‘Labor takes power walk on decade-long tightrope, Australian Energy Market Operator warns’ … again the online title slightly different than in print:

(b)  Graham Lloyd wrote ‘Power planning on a wing and a prayer’.

(c)  Yesterday, leading into the publication of the ESOO, Colin Packham had written ‘AEMO warns contingency plans needed to avoid outages during energy transition’.

That’s all I can see at this point…

3)  In the Guardian we have seen …

(a)  Adam Morton wrote ‘Australia’s electricity grid to remain reliable if renewable projects delivered ‘on time and in full’, Aemo says’.

That’s all I can see at this point.

4)  In SMH and the Age we have seen …

(a)  Mike Foley wrote  ‘Three months to back up the grid as risk of summer blackouts ramps up’.

That’s all we’ve found at this point.

5)  In RenewEconomy we have seen …

(a)  On Thu 29th Aug, Sophie Vorrath wrote ‘New solar, wind and battery boosts reliability outlook, but AEMO says no room for more delay’.

(b)  On Fri 30th Aug, Sophie Vorrath wrote ‘Households will produce more energy than they consume by 2040, and AEMO is paying attention’.

That’s all we’ve found at this point

6)  In PV Magazine we have seen …

(a) Nothing at this point.

7)  In the ABC we have seen …

(a)  Daniel Mercer wrote ‘Summer blackout threat eases but AEMO warns risks remain as coal, gas plants retire’.

… incidentally, in this article Daniel Mercer quotes from Dan Lee’s earlier article on WattClarity about the ESOO as a ‘blackout barometer’.

Have not seen anything else, at this point.

8)  On Sky News we have seen …

(a)  Max Melzer wrote ‘AEMO warns ‘any delay’ to energy projects could cause major blackouts, with NSW, Victoria and South Australia at greatest risk’.

Have not seen anything else, at this point.

9)  On Bloomberg we have seen …

(a)  Rob Verdonck wrote ‘Australian Grid Sees Lower Risk of Power Crunch in Next Decade’.

Have not seen anything else, at this point.

10)  On Ecogeneration we have seen …

(a)  Zihan (Fred) Zhang wrote ‘Renewables soar whilst industry demands more’.

Have not seen anything else, at this point.

As a reader here, if you come across any other useful commentary, feel free to add as a comment below.

(D)  Commentary about the ESOO 2024 from Industry Organisations

So far today I have come across commentary in a range of places, including the following:

1)  From the Energy Users Association of Australia (EUAA) …

(a)  Noting that Andrew Richards (CEO) was quoted in the AFR article noted above, we see his comment here on LinkedIn on Thursday 29th August 2024;.

(b)  That comment linked through to the statement ‘ESOO Shows An Improved Outlook, But We Are Running Out Of Wriggle Room’ on their website.

2)  From the Australian Energy Council (AEC) …

(a)  We’ve not had time to look yet….

3)  From the Clean Energy Council (CEC) …

(a)  We’ve not had time to look yet….

4)  From the Smart Energy Council (SEC) …

(a)  We’ve not had time to look yet….

5)  From the Energy Networks Association (ENA) …

(a)  We’ve not had time to look yet….

6)  From the Climate Council …

(a)  We saw the release ‘Look Mum, we’re actually doing it!  AEMO confirms clean energy is powering up the grid’.

(E)  Across the highpoints on Social Media

If we see anything (that we think is) particularly insightful on Social Media (and we have the time!) we’ll look to note it here:

1)  In this LinkedIn comment here, Alison Reeve (from Grattan Institute) points to the article ‘Wondering what to make of warnings about our electricity system? The outlook is improving – but we’re not out of the woods’ she wrote on the Conversation;

2)  Nothing else yet …