According to a new report prepared for the Australian Energy council, WA’s ambitious plans to decarbonise, bring new renewables and a dispatchable plant onto the grid could be at risk.
A lack of new electricity transmission planning and investment, along with a lengthy, costly and opaque grid connection process are among the risks.
The Council’s chief executive, Sarah McNamara said, “Investors trying to bring new renewables along with dispatchable projects, like gas plants and batteries, onto the grid have been facing significant hurdles. Those hurdles are making it challenging for new projects to be online in time to meet the State’s ambitious decarbonisation agenda.”
WA is undergoing a major energy transition led by the State Government’s policies that will see more renewables come into the grid.
Key policies include the net zero by 2050 target, the renewable hydrogen target as well as plans to close the state’s coal-fired power stations by 2030 and build new wind and battery storage, and the rollout of stand-alone power systems.
There is also expected to be strong growth in electricity demand because of state and Federal policies, and increased electrification.
To meet the state’s emissions targets and make the energy transition away from coal-fired plants the bottlenecks identified in the report (Bottlenecks affecting generation investment in WA) will need to be addressed.
The Australian Energy Council, which is the peak body for energy generators and retailers, commissioned Oakley Greenwood to examine the challenges of getting new generation onto the grid.
“The current ‘first-in, first-served’ approach means that the best new projects could be left waiting in the connection queue for years behind other projects that may not be funded or are in areas where new transmission is not planned.,” said Greenwood.
“What’s required is a quicker and more transparent grid connection process and a credible transmission plan that won’t be changed or overridden. That will bring certainty for investment,” said McNamara.
The Australian Energy Council is the peak industry body for electricity and downstream natural gas businesses operating in the competitive wholesale and retail energy markets.
Two of the key recommendations from the report include the grid connection process needs to be shortened dramatically to increase investor certainty and ensure projects are brought onto the grid in time to meet the forecast capacity shortfall of approximately 4,000MW by 2032-33.
And charging and cost-recovery mechanisms for transmission investments should be clarified and equitable across all investors.