Australian families will need to play a key role in helping the power grid stave off what AEMO describes as a “growing risk” of an energy shortage, with experts calling for more household support.

A systems plan for the climate transition published on Wednesday by the Australian Energy Market Operator (AEMO) warned “urgent investment” is needed to ensure the nation has enough electricity as coal  power stations are turned off progressively through to 2038.

Households are set to play a massive role in the plan, with 80 per cent of homes forecast to have solar panels by 2050, which will be needed to significantly reduce power demand across the grid.

But while Australia is a world leader in solar panel use, fewer than a third of houses use them, sparking fears among experts that governments need to invest more in reducing the cost.

AEMO itself warned Australians face billions in extra costs if houses can’t install enough solar.

University of New South Wales energy systems analyst Dylan McConnell said AEMO has for the first time considered the benefits of distributed energy like solar and the costs of getting it wrong.

They show, he said, a need for policymakers to focus on barriers to solar uptake, particularly for lower-income households and millions of renters who don’t have the capacity to install solar panels.

“There does need to be policy change to the way we do things for households that are facing difficulties [installing solar],” McConnell said.

Source: AEMO

University of Queensland’s Professor John Quiggin says a publicly owned national system is needed to expand state-level solar and wind investments to push the nation toward net zero.

“The AEMO report sets out the urgency of the task of investment in renewables,” Quiggin said.

“But it doesn’t address policies needed to achieve our 2050 goals; it is evident that relying on private investment, even with incentives and public financing, is not going to be adequate.”

Pathway for change

Other research has recently identified a need for expanded support, with advocates looking to pile more pressure on the government as energy shapes up as a key federal election issue.

That’s owing to Opposition Leader Peter Dutton suggesting 2030 emissions targets are unrealistic and unveiling an alternative proposal that would develop nuclear power plants.

Dutton has claimed Labor’s renewables-led plan would cost more than $1 trillion, but that’s contradicted by AEMO’s modelling about the most optimal renewables path, which outline costs about $122 billion.

McConnell said that estimate of the annualised capital costs is based on the sum of the capital costs of new transmission, renewable energy zones and other operating costs out to 2050.

“On one level that’s a big scary number, but on another level it’s quite small … in the context of the whole energy system,” he explained.

McConnell added that the ISP is AEMO’s “least cost pathway” for the energy transition.

Source: AEMO

AEMO did not model nuclear power in its report on Wednesday, but did suggest in an adjoining fact sheet to its report that the technology would be more expensive than the alternatives.

It cited a recent CSIRO report as evidence, which found nuclear power would cost far more than a renewables-led plan, though this research did not consider the Coalition proposal.

That would not be possible anyway, as too little detail has been published about their policy.

“GenCost finds nuclear generation to be a lot more expensive than other options to generate electricity,” AEMO said.

“Also, the time it would take to design and build nuclear generation may be too slow to replace retiring coal-fired generation.”

Experts have pointed to the timeline for setting up nuclear as a key problem with the Coalition proposal, with AEMO forecasting that our existing coal power stations will be offline by 2038.

That’s already a tall task; AEMO warns a massive increase in renewables construction and transmission upgrades is needed before then to avoid excess costs hitting households.

It will require $122 billion in annualised capital costs through to 2050, about 13 per cent ($16 billion) of which is for upgrading poles and wires (transmission) to handle more electricity.

But the modelling also finds the capital returns from these investments would outweigh the costs and that consumers will be $18.5 billion better off than otherwise (without an energy transition).

Households pivotal

AEMO’s plan has households playing a pivotal role in the transition through installing rooftop solar, but as recent research by Solar Citizens and UNSW found, there is a need for further government action to assist lower-income households in making the shift.

Apartment buildings are one key issue, with researchers saying people face “challenges”.

“Apartment owners and residents are often excluded from state government subsidies for solar and/or batteries, either explicitly or implicitly,” they said.

“Targeted subsidies for solar on apartment buildings, to support both feasibility studies and installation costs, are therefore needed to address the shortfall in this building sector,” they also said.

Source: AEMO.