National Electricity Market: Future connectivity and reliability

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National Electricity Market: Future connectivity and reliability

Connectivity of the National Electricity Market regions
Early-stage proposal (Stage 1)
Location
National
Geography
National
Category
Energy Transformation
Problem/Opportunity timeframe
Medium to longer term (5–15 years)
Proposed By
Infrastructure Australia identified proposal
Date added to the IPL
14 February 2019

Opportunity

The National Electricity Market (NEM) is undergoing a once-in-a-lifetime transition from thermal generation to intermittent renewables (such as wind and solar), complemented by firming generation (such as pumped hydro). By 2035, significant investment will be needed in renewable and firming generation and associated transmission to continue providing affordable, reliable and secure energy for users.

By 2040, over 26 gigawatts (GW) of  large-scale renewable energy, backed up with up to 19 GW of new dispatchable resources, will be required to replace retiring coal-fired generation.

To ensure an orderly and cost-efficient transition, the transmission grid will need augmentation to balance generation resources and connect Renewable Energy Zones. Approximately 22 GW of new connection capacity is required in Renewable Energy Zones by 2040 to meet this growing need.

During this transition, the NEM will need  to deliver greater volumes of generated  and stored energy to meet changing patterns of consumer demand, balance intermittency, and increase system reliability and resilience by transmitting energy across and within regions.

The Australian Energy Market Operator, which operates the NEM, released an update to its Integrated System Plan (ISP) in 2020.  The ISP was first released in 2018 and  formed part of the evidence base for  
this proposal. Short-term optimisation of the NEM  is also identified as a Early-Stage Proposal on the Infrastructure Priority List.

Proposal

The 2020 ISP provides an actionable roadmap to guide governments, industry and consumers on investments needed for an affordable, secure and reliable energy future. The proposed proposal is to provide increased transfer capacity between regions and improve network access to energy storage locations and renewable energy sources. This 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 proposals 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 proposal.

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 regulatory assessment and any other processes required by governments.

Next steps

Proponent(s) to be identified.