Less Transmission Investment Needed - Media Release11 Dec 2012 | filesize: 77 kb (.pdf)
The 2012 National Transmission Network Development Plan (NTNDP) released by the Australian Energy Market Operator (AEMO) today shows less transmission investment is required compared to previous estimates and there is a clear opportunity to gain greater efficiency from this investment.
The 2012 report reflects changes in the energy environment including lower electricity demand and energy forecasts, the impact of a carbon price and higher projected gas costs. Lower forecast demand growth has resulted in a revised estimate for transmission investment of $4 billion over 20 years. Previous NTNDP modelling estimated an investment of $7 billion in the main transmission networks over the same timeframe.“A well-developed transmission network is a key to meeting the National Electricity Objective of efficient investment in, and efficient operation and use of electricity services for the long-term interests of electricity consumers,” said AEMO Managing Director and Chief Executive Officer Matt Zema.
“Most main transmission network limitations which drive investment are due to electricity demand growth in major cities and other locations of high electricity use. Investment will also be required to manage changed power flow patterns resulting from new generation being built and possible generation retirement.”
The NTNDP takes a least-cost approach to power system development, identifies the best location of infrastructure to deliver the most efficient investment outcomes and reflects AEMO’s best estimate of economic and policy outlooks.
“Taking a least-cost approach, there is generally sufficient capability in the existing transmission network for new generation to connect in areas that can accommodate growth in electricity demand and avoid significant new transmission investment,” Mr Zema said.
Slowing electricity demand growth and likely future economic and policy conditions suggest there will be less need for additional capacity on single interconnectors between states within the 20-year outlook.
In addition to main transmission network augmentation, further investment will also be needed to replace ageing assets and augment transmission networks to meet local demand growth.
Eastern and south eastern Australia will still rely on coal-fired generation during the outlook period. New generation investment until 2020, particularly wind generation, will primarily be driven by the Large-scale Renewable Energy Target (LRET).
Using a least-cost approach, there is no need for combined cycle gas turbine (CCGT) generation plants for at least a decade. CCGT would require a higher carbon price and lower gas prices to compete with other generation sources. However, there is still a need for open cycle gas turbine (OCGT) generation during periods of high electricity demand.
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