It estimates the present capacity surplus is 8950 megawatts, which is equal to about 90 per cent of the coal-fired power stations in NSW, or all of Victoria’s brown coal and gas-fired power stations. ”More than 7500 megawatts of generation capacity would be needed to be removed from the market to affect supply adequacy in 2014-15,” AEMO chief executive Matt Zema said.
Electricity supplied through the national electricity market - which excludes Western Australia and the Northern Territory - has been declining since at least 2009-10, reflecting the impact of rising power prices along with the sharp decline in the cost of solar photovoltaic systems that, together with government subsidies, has led to a surge in installations.
Typically, it seeks a ”reserve margin” of 15 to 20 per cent to ensure power supplies are not interrupted because of generator failures. ”Electricity consumption from the grid has continued to decline in 2013-14, and this has contributed to an oversupply of generation capacity in the NEM (national electricity market),” Mr Zema said.
The continued slide in electricity demand, which is expected to extend for at least three or four years, will deepen the glut of power generation capacity in the national electricity market to a point where it will not be absorbed for at least the next decade.
Between 2009-10 and 2013-14, electricity consumption in the national electricity market fell by 1. 8 per cent a year, which the operator forecasts will decline by a further 1. 1 per cent a year until 2016-17, if the Queensland demand for its gas processing plants is put to one side.
Read more here: SMH