|Reduced energy growth changes the energy investment landscape
Media Release : 09 Aug 2012
National Electricity Market (NEM) has deferred signals for new base load generation investment for at least four years, with renewables and peaking generation emerging as key areas of opportunities in the future.
The Electricity Statement of Opportunities (ESOO) released today presents an outlook for NEM supply capacity for the years 2012-22 and provides a broad analysis of generation and demand side investment.
"The ESOO shows low reserve condition (LRC) points – which are indicators of when new investment in generation is required – have been deferred for most NEM states as a result of a fall in electricity use and forecasts of slower growth in both annual energy and maximum demand," said AEMO Managing Director and Chief Executive Officer Mr Matt Zema.
"Investment across the Australian energy sector is being buoyed by interest in renewable technologies, particularly wind – as a result of the Large-scale Renewable Energy Target (LRET)," Mr Zema said.
The ESOO also highlights publicly-announced proposals, including over 13,000 MW of wind generation capacity and over 11,000 MW of open-cycle gas turbine (OCGT) generation capacity. There is less focus on base load generation, with around 3,300 MW in black coal and 3,000 MW of combined-cycle gas turbine generation capacity.
The timeframe for the Commonwealth Government’s Contract for Closure (CFC) program, designed to deliver the closure of around 2,000 MW of high emissions-intensity coal-fired generation capacity by 2020, was extended at the end of June; the ESOO does not consider impacts of the CFC.
The ESOO outlines existing generation plant revisiting their business model for the way they operate in the market.
The ESOO is complemented by the Power System Adequacy (PSA) – two year outlook, also released today, which shows the power system is expected to operate securely and reliably during 2012-2014.
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