Power Transmission and Distribution Market in Australia

Australian Transmission market has been under stress due to solar and has grown by almost 20% in last 3 years. Australia is governed by the National Energy Market and AEMO which is an intricate system of systems, which includes regulatory, market, policy and commercial components.

The entire system has been going through a major change due to changes in energy mix and energy transition.

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Renewable energy sources such as wind and solar farms are putting downward pressure on energy prices, and there are hundreds of new renewable facilities set to come online.

In fact, Renewables have increased the total NEM generation capacity from 40 gigawatts to 60 gigawatts since 2007.

More than 30 gigawatts of renewable generators and 12 gigawatts of energy storage are expected to come online by 2040.

This green energy is stretching the Australia’s outdated network of transmission lines.

Australia's high-capacity transmission lines were designed to service centralised electricity generation from coal-fired power stations.

But renewable projects are being built in parts of regional Australia where wind and solar produce the most energy.

In many cases, these are the areas where the transmission network is weakest, with ageing power lines that were never designed to transport electricity from large-scale renewable generators.

The latest forecasting by AEMO indicates that there is an urgent need for more spending on transmission infrastructure to avoid energy price spikes and blackouts.

AEMO has come up with Integrated System Plan 2020 which outlines major investments and infrastructure upgrades.

The ISP has identified four categories of transmission projects ‒ Committed, Actionable, Actionable with decision rules, and Future ISP projects. Some of the actionable ISP projects which are critical to address cost, security and reliability issues, and are either already progressing or are to commence immediately in 2021 include

• VNI Minor, a minor upgrade to the existing Victoria ‒ New South Wales Interconnector (VNI), which is very close to completing its regulatory approval process, with project completion expected in 2022-23
• Project EnergyConnect, a new 330 kV double-circuit interconnector between South Australia and New South Wales, which is close to completing its regulatory approval process, with project completion expected by 2024-25.
• HumeLink, a 500 kV transmission upgrade to reinforce the New South Wales southern shared network and increase transfer capacity between the Snowy Mountains hydroelectric scheme and the region’s demand centres. This project commenced its regulatory approval process earlier this year, with project completion due by 2025-26.
• Central-West Orana REZ Transmission Link, involving network augmentations to support the development of the Central-West Orana REZ as defined in the New South Wales Electricity Strategy, and transfer capacity between the Central-West Orana REZ and major load centres of New South Wales. The project completion is due in 2024-25.

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