Mr Zema said that although the new report estimated there could be up to 8950MW of surplus capacity this year, investment could still be needed because of schemes to support renewable energy generation, to meet local “pockets” of growing demand, and to manage “intermittent generation”.
The report says electricity use will fall over the next three years because of the decline of energy-intensive industries, including the decline of Victoria’s Point Henry aluminium smelter and energy efficiency measures.
The report comes as the Australian Competition & Consumer Commission will today reveal that it has issued more than 250 notices related to the carbon tax repeal, pushing businesses in sectors including electricity and gas to detail how the repeal is affecting their prices.
The report by the Australian Energy Market Operator will again focus debate on warnings that federal and state policies, including the renewable energy target, have pushed the market to breaking point.
Earlier this year, EnergyAustralia — which owns the Yallourn brown-coal power station in the Latrobe Valley — warned that big baseload coal plants “simply hope another business will exit first” as they would face hundreds of millions of dollars in redundancy and mine rehabilitation costs.
A report to be released today reveals that this is the first time this has happened in the history of the electricity market, which was created in 1998 after the Hilmer review and spans the eastern and southeastern coasts.
Even if electricity consumption were to grow at high levels for the next 10 years, by 2023-24 more than 4500MW could be withdrawn from the market without affecting the adequacy of supplies, the report finds.
Read more here: Business Spectator