The Australian Renewable Energy Agency (ARENA) has allocated AUS$15 million (US$9.7 million) to the Australian Electricity Market Operator (AEMO) to enhance the operational capacity of the National Electricity Market (NEM). This funding aims to support solar energy and other renewable technologies, including hydro and wind, as well as energy storage systems crucial for a renewable energy-based grid.
ARENA stated that the funding will expedite the operational readiness for significant power system changes over the next two years, reducing reliance on fossil-fuel generators to maintain system stability.
“This will, in turn, help make efficient use of available renewable energy resources, alleviate future system security management challenges, and reduce future reliance on fossil-fuel generation. ARENA's grant funding will accelerate this critical work, enabling the deployment of innovative and timely solutions to support our future power system,” said AEMO CEO Daniel Westerman.
The initiative will aid AEMO in developing governance frameworks, systems, and processes to facilitate consumer adoption of rooftop solar, batteries, and electric vehicles (EVs). Additionally, it will provide investors with better visibility into the evolving needs of the power system and the potential for various technologies to address these needs.
AEMO has projected that the NEM, which interconnects southern and eastern Australia, requires approximately AUS$16 billion in grid infrastructure investments to achieve net zero. This includes the development of around 10,000km of transmission projects to accommodate new renewable energy sources.
Westerman emphasized the importance of this funding, especially as coal-fired generation is expected to be phased out by 2038. Increasing the operational capacity of the NEM is critical to ensuring the continued strong performance of renewable energy in the electricity mix.
AEMO's recent report highlighted that grid-scale solar generated an average of over 1.4GW in Q2 2024, marking a 132MW year-on-year increase, driven by new facilities in New South Wales. The report also noted that 43GW of new capacity is progressing through the connection process, underscoring the need for grid infrastructure investment.
Projects seeking to connect to the NEM rose to 43GW in June 2024, a 43% increase year-on-year. Ensuring these projects can connect without delays is essential to meet the 2030 decarbonization targets.
