Purpose: To explain the purpose of the ISP, its scenarios and assumptions

The Critical Issues:

  • Scheduled retirement of scheduled generators (coal, gas, battery), with construction of intermittent wind and solar:
Period Retired dispatchable MW Built dispatchable MW Intermittent MW
2010-2020 2,500   7,100 built
2020-2030 5,800 2,400 (incl Snowy 2) 10,500 underway
2030-2040 14,000   39,000 announced
2040-2050 12,000  

(2) The ISP is the official National Electricity Market transmission network plan. It requires network operators to begin planning the transmission projects that AEMO wants. It is designed to encourage more wind and solar into the network.

This is central planning at its worst – many network companies are privatised with foreign ownership. Because of the regulated cost recovery, network companies earn more from more assets. Every km of network adds to Australian consumer power bills and makes the country less competitive.

(3) Despite the massive amounts of wind and solar being built, the grid still requires investment in dispatchable generation. The ISP cost benefit analysis for transmission projects relies on modelling that includes a carbon price (CSIRO GenCost) and assumptions that are unfavourable to coal and gas. The taxpayer funded Snowy 2.0 is the only dispatchable generation planned apart from AGL‘s 250 MW gas peaker in Newcastle and some minor upgrades to existing plant capacity. Much more will be needed.

(4) No allowance is made in the ISP for replacement of coal fired power stations, despite Australia’s ready access to high quality thermal coal as fuel. This can only be described as ideology, not economics or science.

Key features of the situation. (Briefing Paper follows)

Recommendations.

That all politicians and media be advised:

  • The National Electricity Market network is becoming centrally planned, with accountability being removed from the states
  • The ISP assumes massive amounts of wind and solar will be built, and is planning to build new networks not only to accommodate wind and solar, but to expand it beyond the bounds of open market competition
  • The ISP deliberately applies unfavourable assumptions to economic modelling of coal and gas
  • A larger more complex network costs more to build and maintain – foreign owned transmission network companies recover these costs at regulated profit margins – this is incentive to build more transmission networks
  • CSIRO GenCost mentions “renewables” 70x, “carbon price” 52x, “reliability” 1x, “intermittent” 0x