National Electricity Market (Future connectivity and reliability)

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Connectivity of the National Electricity Market regions
High Priority Initiative
Infrastructure Category
Energy
Timeframe
Medium term (5-10 years)
Location
National
25_National Electricity Market (Future connectivity and reliability)

Opportunity

In the medium to longer term, there is an opportunity to improve the connectivity and reliability of the National Electricity Market (NEM). In light of retiring coal-fired generation and various government renewable energy commitments, improved connectivity across NEM regions will make better use of renewable resources, and more efficiently meet operational demand. Additional connectivity would also improve reliability by providing access to energy storage devices.

The Australian Energy Market Operator released the Integrated System Plan (ISP) in 2018, which forecasted a continuing trend away from thermal electricity generation, and towards a more diverse portfolio of fuels, including wind and solar. Improved connections between regions would allow for better use of resources across the NEM, provide more access to storage, and support renewable energy zones. The ISP identified the longer-term need to ensure system reliability and security.

Short-term optimisation of the NEM is also identified as a Priority Initiative on the Infrastructure Priority List.

Proposed initiative

The ISP identifies three groups of investments over the near, medium and longer term. This initiative relates to Group 2 and 3 investments, which are potential investments between the mid-2020s and 2040, and includes:

  • new and increased transfer capacity between regions, such as between Queensland and New South Wales, New South Wales and South Australia, and Tasmania and Victoria
  • network access to energy storage locations
  • network access to renewable energy sources.

Potential initiatives also include the Tasmanian Government’s Second Bass Strait Interconnector project (also known as the ‘Marinus Link’). This was previously listed on the Infrastructure Priority List as a longer-term Priority Initiative and is now captured under this broader initiative.

These potential medium- and longer-term investments are subject to change as the ISP is updated to reflect the dynamic nature of the power system and evolving technologies.

The investments and their timing will also be subject to feasibility studies and detailed assessment of their costs and benefits by network infrastructure owners and governments.

Next steps

Proponent(s) to be identified.