Energy regulator AEMO warns of summer blackouts across Victoria, South Australia as delays to new power sources hit supply

The Australian Energy Market Operator is warning summer blackouts could be ahead for residents in Victoria and South Australia, as the energy regulator urges governments to address a shortfall in supply.

AEMO’s appeal comes off the back of delays in the construction of new power sources and transmission infrastructure, while existing coal-fired plants continue to come offline.

“Reliability risks”, including the potential for blackouts, are expected to impact New South Wales in 2025 and Queensland in 2029, as the energy regulator forecasts a decade of unstable power supply unless governments act to close the gap between generation and consumption.

AEMO CEO Daniel Westerman said the findings, which come from the regulator’s Energy Statement of Opportunities (ESOO) report, showed it was “critical” Australia accelerate its transition to renewables to make up the shortfall from retiring fossil fuel plants.

“Over the 10-year outlook, we continue to forecast reliability gaps, which are mostly due to the expectation that 62 per cent of today’s coal fleet will retire by 2033,” he said.

“To ensure Australian consumers continue to have access to reliable electricity supplies, it’s critical that planned investments in transmission, generation and storage projects are urgently delivered.”

The report puts further pressure on the Albanese government to come good on its pledge to more than double the level of renewable energy in the system to 82 per cent of supply by 2030.

Key to meeting that promise will be the construction of new power lines and other transmission infrastructure, but the government is facing stiff opposition from farming groups who claim building the lines will harm their property and impact livelihoods.

In response, landowners have been offered up to $200,000 per kilometre to allow construction on their property, in the hope this will convince many to take part in the plan.

The ESOO also creates a further headache for the NSW government with the “reliability risks” identified in the report coinciding with the closure of Origin Energy’s Eraring coal power station.

With the possibility of blackouts looming, the Minns government has been under pressure to find a way of securing supply in the state without cutting a deal to support Eraring with taxpayer funds.

Origin’s plant could become unprofitable as soon as next year, suggesting such a deal could prove costly.

While the ESOO forecast is bleak, Mr Westerman stressed that it only accounted for projects currently announced or underway and much of the risk could yet be offset.

“Federal and state government initiatives, including transmission projects identified in the Integrated System Plan, and mechanisms delivering firming capacity, such as the Commonwealth’s Capacity Investment Scheme, can address many of the identified risks over most of the 10-year horizon, if delivered to schedule,” he said.

The AEMO boss added personal solutions, such as “rooftop solar, batteries and electric vehicles,” could play a part in easing the burden on the national grid.