Australian Energy Market Operator warns there could be energy 'reliability gaps' ahead for homes, businesses

Rolling out rooftop solar and batteries to more homes will cut the cost of living and secure an increasingly cleaner electricity grid, the energy market manager says.

In the meantime, a two-year extension of NSW’s Eraring, Australia’s largest coal-fired power station has helped to improve reliability, Australian Energy Market Operator CEO Daniel Westerman said on Thursday.

Speaking to the operator’s latest 10-year outlook to address fears development has stalled, Mr Westerman warned investments in new generation, storage and transmission must be delivered “on time and in full” to maintain a reliable supply of electricity to homes and businesses.

The 2024 Electricity Statement of Opportunities sets out the operator’s view of what needs to be built to have a reliable national electricity market as the nation’s fleet of ageing coal plants are shut down in stages.

Mr Westerman said the energy transition was well underway, with renewable generation already supplying 40 per cent of the electricity into east coast homes and businesses.

In South Australia, the share of clean energy in the grid is closer to 80 per cent and Tasmania is 90 per cent powered by renewables.

He said the reliability outlook had improved in the past year, assisted by the progress of 5.7 gigawatts of grid-scale generation and storage and 365km of new transmission developments.

“This progress, along with delivery of transmission projects, a coal plant extension, and higher contribution from rooftop solar, has improved the reliability outlook,” he said.

But modelling indicates there will be some reliability gaps over the next 10 years if projects are delayed.

“If delays occur to projects already underway or further investment does not materialise, then the outlook for reliability will deteriorate,” he warned.

The independent Climate Council’s head of policy and advocacy Jennifer Rayner said around 3.6 million households were already enjoying the benefits of rooftop solar, with lower bills, less pollution and more control.

“The energy operator is right that rolling out solar and storage to millions more homes in a coordinated way is a huge opportunity to cut costs of living for more families and secure even more reliable energy,” Dr Rayner said.

“This should be a top priority for all politicians at the coming federal election.”

Electricity analyst at the Institute for Energy Economics and Financial Analysis Jay Gordon said the outlook for consumer energy resources had been upgraded, reflecting the fact that households were installing larger rooftop solar systems.

Although previous forecasts have underestimated their role, Australian households are expected to produce more energy than they consume by 2040.