Transition Points in Australia’s Power Grid
29 July 2025, Sydney
Good morning.
I’d like to acknowledge the Gadigal people of the Eora Nation as the Traditional Owners of this land, and to recognise their continuing connection to country and culture.
It is on the lands of First Nations people that our industry works to provide energy for Australian consumers.
I acknowledge all First Nations people, and pay my respects to Elders past and present.
I acknowledge the Honourable Penny Sharpe, and the focus that NSW has on a successful energy transition.
I’d also take this opportunity to say acknowledge Kane Thornton for his leadership of Clean Energy Council over the past decade.
Kane, your contribution to Australia’s energy transition leaves a legacy, not just for what you’ve achieved, but also for how you’ve done it.
Somehow, you’ve maintained your signature smile and warmth throughout the years of tireless work in supporting clean energy and helping drive the energy transition.
Thank you Kane.
It’s great to be here at the Clean Energy Summit - this is my fourth year representing AEMO, and it’s wonderful to be here among colleagues from across the industry.
But wherever I am and whatever I am doing, my mind is never very far from AEMO’s control rooms.
Every minute of every day, our teams are making sure that Australia’s energy systems and markets are secure and reliable - keeping the lights on and the gas flowing for millions of Australian homes and businesses.
They’re monitoring system performance from thousands of data sources, managing contingencies as events unfold, and making sure the supply of electricity and gas is secure and stable.
Now you might be picturing a room like NASA’s Mission Control.
In fact, our control rooms for real-time operations are actually quite modest and run by just a handful of operators, but they’re enabled and supported by hundreds of others outside the room who make it possible for them to perform their critical work.
The National Electricity Market is designed to operate with only a light touch from AEMO under normal conditions.
A lot of the time it runs as it should: Clear price signals incentivise supply to match demand, and essential system services that have historically been plentiful supply from the large number of synchronous generators.
But at times – and quite quickly sometimes – active interventions are needed to make sure the bulk power system remains in a secure operating state.
I’ve shared previously that these manual interventions are becoming increasingly common.
In 2016, just six manual interventions were issued for the whole year – that’s the way the NEM and AEMO were designed to operate.
But last year, that number was 1800… nearly five manual interventions a day.
The system is changing rapidly.
And this is a period that needs to be navigated by plotting the right course, and by having two very steady hands on the steering wheel.
Right now, our control rooms are becoming mission control for one of the most complex, and critical challenges of our time: how we manage this evolution of our energy systems.
It’s fast and it’s high stakes.
On April 28th, up to fifty million people across Spain and Portugal went without power for ten hours, and some for longer.
Hospitals and telecommunications were affected. Airports, trains, and roads were chaos.
Schools and businesses closed, and life was significantly disrupted.
It’s a stark reminder that a secure and reliable supply of energy is the backbone of modern society.
Power systems are complex, and detailed investigations are still ongoing, but it’s very clear that there was not just one single event or root cause.
Up to 12 simultaneous issues have been identified as contributing to the cascading trips of generation, and ultimately the complete collapse of the power system.
Their system saw: swings in voltage; reductions in reactive power; unexpected behaviour of grid connected equipment; oscillations in system frequency, and more...
All things that we broadly put in the category of system security.
In Australia, we already have a laser-focus on keeping these technical attributes of the power system in good health: at AEMO, at network companies, and within our industry as a whole.
And while I’m sure there will be learnings from the Spanish event, AEMO’s annual assessment process already clearly identifies any system security shortfalls in the planning horizon, which then require remediation, typically by transmission networks and planners.
But system security is a very strong focus for us at AEMO, in order to enable the next set of transition points in Australia’s energy transition.
So where are we now?
Well, the reality is that Australia’s energy transition is well underway.
Ten coal fired power stations have closed since 2012 in the NEM.
Four million Australian homes and businesses have rooftop solar.
Power from that rooftop solar supplies over half of all demand in the NEM for periods of time, and over 100% of demand for periods in South Australia.
Renewable energy, large and small, now supplies over 40% of demand throughout the year in the NEM … roughly double the contribution renewables made just five years ago.
There are periods of time when renewable energy has supplied as much as 75% of demand in the NEM, and 85% in Western Australia.
And that’s right at the top end of major international power systems.
New demand records are regularly being set: for maximum demand as our society grows and as we electrify our lives…
… and for periods of record low or minimum demand for power from the grid, when excess rooftop solar power is fed back up into the system.
We’re also seeing peak demands in the winter growing.
In fact in NSW in June, the winter peak outstripped the summer peak, which is a trend we expect to continue.
And for several years our reports have been clear: that when it’s cold, dark and still, the ultimate backstop for reliability is gas powered generation.
To bring that to life, June saw periods when it was cold, dark and still… and that resulted in both an all-time record gas demand for power generation in the NEM, as well as 5 of the top 10 gas demand days for power generation in the past decade.
AEMO’s message has been consistent and clear: that as Australia’s coal fired power stations retire, the least cost replacement for that energy is renewable energy, firmed with storage, backed with gas, and connected with upgraded networks.
Companies in this room and beyond are responding through their investments.
Governments are incentivising these investments and working to enable this ongoing, nation building transformation.
At AEMO, I set an ambition in 2021 for us to understand what it takes to run a power system on 100% renewable energy.
And today, we’re confident that with targeted investments in system security assets, we can do just that.
I’m incredibly proud of this, but the future is coming at us fast and those system security investments are needed urgently.
New connections are one indicator that investment momentum is growing.
The NEM has historically added between 3-4 GW of new generation and storage capacity each year, and figures for the last 12 months show the momentum is growing:
- A record 4.4 GW across 29 projects were commissioned to full output.
- Another 9 GW across 37 projects had their registration approved.
- And a staggering 15.7 GW across 60 projects had their application to connect approved.
Those projects in the earlier stages clearly need positive investment decisions, planning and community consultation, and construction … but these numbers show that a wave of new generation and storage projects are set to be delivered over the years ahead.
So, a big thank you to everyone in this room and beyond, who are delivering the investments that Australian consumers need.
I used words “transition points” earlier, and we have a laser focus on them at AEMO.
But what are they?
They’re step changes in the make-up or operation of the bulk power system.
Let me describe two that we’re planning for in the near term:
The impending exit of large synchronous generation – think of Eraring and Yallourn.
Periods of time when rooftop solar is so abundant that it makes the provision of system security services very challenging – we call these periods of “minimum system load”.
On the first transition point: Australia’s coal fleet was mostly built in the 1970s and 80s and that means they’re getting old.
Ten plants have already retired since 2012, and 90% of the remaining fleet are expected to close in the next decade.
When these large generators exit the system, we lose more than megawatts and megawatt hours.
We also lose system strength, voltage control, frequency support, and system restart services.
Battery storage systems with grid-forming capabilities will help with many of these essential power system characteristics, but not all of them.
For upcoming each transition point, AEMO works through a very clear framework to assess both reliability and system security.
Often, system security is the most urgent and pressing challenge and needs investment in additional plant and infrastructure.
It goes without saying that real-time solutions, like directions from our control room, are only possible when there is something physically there to direct.
And when those old coal fired power stations retire or break down, essential system services will need to be provided by synchronous condensers, or gas power stations fitted with a clutch that enable the generators to support the grid without burning fuel.
So while those gas plants may only burn fuel 5% of the time when producing electricity during those cold, dark and still periods, they can help keep our grid stable 100% of the time, just by spinning.
But until enough of these replacement synchronous options are delivered, our control room operators will need intervene and make directions to existing generators, to make sure our grid is safe and secure.
We describe the 2nd transition point as periods of “Minimum System Load”.
These conditions occur on mild, sunny days, when demand on the grid plummets because those 4 million rooftop solar systems are doing the heavy lifting.
Grid-scale generation through the transmission network drops dramatically, and the system security services that they provide disappear too.
Across the NEM, records for minimum demand have fallen dramatically.
Homes and businesses have been a driving force in Australia’s energy transition, and part of our job at AEMO is to help support consumers making their choices while maintaining a secure power system.
So, what would it take to help enable more Australians to enjoy the benefits of their rooftop solar?
Batteries of all shapes and sizes: that’s household batteries, community batteries, and grid-scale batteries.
And rotating machines like synchronous condensers or gas turbines with a clutch, that can provide essential system services without burning fuel or generating power.
But these minimum system load transition points are approaching fast, and these solutions are urgently needed.
So, where to from here?
AEMO’s is an enabler of Australia’s energy transition.
We provide a set of roadmaps to navigate that transition, but it’s people in this room and beyond who are building the necessary infrastructure and engaging with communities.
Momentum is building in new generation and storage assets … but more work is needed to ensure that essential system security services are available at every transition point.
Because energy is the backbone of modern society.
And our focus must always be on the families, businesses and communities who depend on our essential service.
Thank you.
[ENDS]