FORECASTS AND KEY INFLUENCING FACTORS FOR GRID SUPPLIED ENERGY November 2016 NSW PRESENTED BY NICOLA FALCON MANAGER SUPPLY PLANNING SLIDE 1
CHANGING NATURE OF THE AUSTRALIAN ELECTRICITY INDUSTRY Market evolution: Technology revolutionising the sector Utilities transforming Markets are evolving Security and reliability increasingly important Need to balance reliability and cost to consumers while meeting carbon emission reduction targets and maintaining power system security the trilemma SLIDE 2
HOW CAN AEMO HELP THE INDUSTRY PLAN FOR THE FUTURE? National National Electricity Information Provider Provide Supply-demand information for the National Electricity Market and the Wholesale Electricity Market National Gas Information Provider Provide information on gas reserves, production, processing, storage, pipelines and demand in all states except NT National Transmission Planner Provide information on where and when transmission will be required in the NEM Regional Victorian Transmission Network Service Provider Plan using an economic cost-benefit test and make investment decisions Procure services using competitive tendering but does not own any assets Connect new generation to the grid Victorian Gas Planner South Australian Independent Advisor Provide information on the current and future state of the electricity market in SA including demand, supply, historical trends and emerging challenges SLIDE 3
CHANGING CONSUMPTION TRENDS SLIDE 4
CHANGING CONSUMPTION TRENDS Battery storage SLIDE 5
NEM ANNUAL CONSUMPTION SLIDE 6
ELECTRICITY CONSUMPTION FORECASTS BY SECTOR From 51,074 GWh to 42,896 GWh over the 20-year forecast period From 50,684 GWh to 53,944 GWh over the 20-year forecast period From 85,911 GWh to 95,313 GWh over the 20-year forecast period SLIDE 7
EXAMPLE: NSW SUMMER MAXIMUM DEMAND Maximum demand forecasts are slightly trending down The trend in New South Wales maximum demand is similar to other states. Except Queensland has early LNG-led growth, then forecast to remain flat. South Australia maximum demand projections are slightly more negative. SLIDE 8
EXAMPLE: NSW SUMMER MINIMUM DEMAND Minimum demand is forecast to remain flat until mid-2020s and reduces thereafter. Minimum demand shifts from overnight to noon due to rooftop PV growth The trend in New South Wales minimum demand is similar to other states. Except Queensland has early LNG-led growth, then forecast to remain flat. South Australia is already trending down due to rooftop PV. SLIDE 9
IMPACT OF CLIMATE CHANGE POLICY SLIDE 10
DRIVERS IMPACTING THE NEM Qld Government energy policy s 50% renewables target Retirement of NSW base load coal fired generation System security: decreasing inertia and system strength VIC Government energy policy s 40% renewables target TAS Interconnector reliability and renewables expansion SLIDE 11
SUPPLY ADEQUACY FOR SECURE AND RELIABLE OPERATION OF THE NEM As intermittent generation (such as wind and rooftop photovoltaic (PV) generation) continues to increase and thermal synchronous generation (such as coal and gas-fired generation) withdraws: o Total installed generation capacity alone becomes a less reliable indicator of supply adequacy. o Availability of plant to supply energy when needed, and capability to provide ancillary services, are both key factors to consider when assessing opportunities related to secure operations and supply adequacy in the NEM. SOURCE: 2016 NEM Electricity Statement of Opportunities SLIDE 12
NEW SOUTH WALES SUPPLY ADEQUACY SLIDE 13
SUPPORT SERVICES: NEW SOUTH WALES Support service/system security challenge Supply gap Frequency control System restart No anticipated supply gap in next 10 years New generation, which can be restored quickly, could help the region restart sooner following a major supply disruption. Rate of change of frequency No anticipated system security challenges in next 10 years SLIDE 14
POSSIBLE FUTURE SUPPLY OUTLOOK - NEM SLIDE 15
POSSIBLE FUTURE SUPPLY OUTLOOK NSW GENERATION SLIDE 16
WHERE WILL THIS GAS COME FROM? Future GPG consumption highly dependent on timing of coal-fired generation retirements SLIDE 17
IMPLICATIONS FOR GAS By 2035, GPG consumption could potentially reach up to 500 PJ across the NEM: o Around 20% of total gas consumption o Would represent around half the domestic gas demand o NSW accounts for almost half of this GPG demand but has no indigenous supplies (once Camden ceases production in 2023) SOURCE: 2015 NGFR SLIDE 18
A HOLISTIC PLANNING APPROACH IS NEEDED SLIDE 19
PLANNING FOR THE FUTURE Resolving regional based limitations individually will potentially create excessive capacity, or potentially dismiss solutions by not considering benefits to other regions Long term NEM wide solutions may include combinations of: Operational measures Regulatory changes New technologies Increase in regional interconnection Industry wide engagement critical to ensure coordinated, national approach to the transition to a low carbon future National Planning Initiative: a forum to establish industry engagement SLIDE 20
NATIONAL PLANNING INITIATIVE A National Planning Initiative will: Recognise that effective and efficient energy solutions will require all parts of the energy supply chain. Bring together all stakeholders to consider the needs of the integrated electricity market holistically. Consider network and non-network, and regional and cross border solutions that maximise NEM wide benefits of system security, integration of renewables, and cost of electricity (and potentially gas). Allow proposals and committed project information to input to the National Planning Process (NER 5.20). SLIDE 21