Offshore wind now appears in latest ISP

The ISP also forecasts that greater flexible gas generation is needed

From Cornwall Insight Australia’s Energy Market Alerts service

Offshore wind officially appears in the draft 2024 ISP due to state-based offshore wind targets. Figure 1 below from our latest Energy Market Alert, shows the variance in forecast generation between the 2022 and draft 2024 ISP. While offshore wind is still relatively uneconomic compared to onshore wind, the more significant social licence issues encountered in onshore wind projects combined with the prospect of state government support may make offshore wind increasingly attractive. This is borne in this ISP, where offshore wind hits a cap of 9,000 GW, displacing onshore wind and utility-scale solar.

Figure 1: Variance in generation capacity between 2022 and draft 2024 ISP (GW)

Source: AEMO Draft 2024 ISP data, AEMO 2022 ISP data

The above figure also forecasts the more significant role ‘flexible’, or peaking, gas plants will play over time. Flexible gas includes gas-powered generation and potential hydrogen and biomass capacity, although the ISP only forecasts a small proportion from these fuels. In total, the NEM is forecast to need 16.2 GW of gas-powered generation. Of the current 11.2 GW capacity, about 8 GW is forecast or announced to retire so that that capacity would be replaced and another 5 GW added. This may be either a greenfield or a brownfield development, but the gas generation must be flexible. This is a change in the role of GPG from more continuous ‘mid-merit’ gas to a strategic, backup role. Gas generation may be at risk should electricity and gas demand peak simultaneously.

Our Energy Market Alerts are designed for asset developers and owners, retailers, generators, regulators, policymakers, investors, and other energy stakeholders.

The alerts are published ad hoc and sent to customers as soon as possible after major regulatory and market developments, including rule changes in Australia. In addition, subscribers have free access to our online ‘Quarterly regulatory and policy webinar updates’, where you can hear from our experts on the latest insights.

Related thinking

Regulation and policy

Calm after the storm although transition begins to lag | 2023 year in review

This year saw a return to relative calmness after the energy shocks of last year, while governments are playing an increasing role as the rate of new renewable generation lags. Spot pricing was subdued compared to last year, with no significant unexpected outages that caused sustained price spikes. Higher levels...


Very Fast FCAS markets in the NEM

Cornwall Insight Australia released the latest Frequency Control Ancillary Service (FCAS) price curves for Q4 2023. The two new Very Fast FCAS markets have begun, and with this report, Cornwall Insight Australia explores how they’re evolving and what the future outlook of these markets holds. Detailing a full 20-year interval...

Commercial and market outlook

Latest Benchmark power curve insight

Cornwall Insight Australia has released our latest NEM Benchmark power curve (NEM BPC) for Q4 2023 to our subscribers. Our latest edition includes Marinus Link, ESSO constraints and other updates. We have released a free excerpt, which you can access below.The Federal Government has announced a partnership with the Marinus Link...


New South Wales REZ outlook

From Cornwall Insight Australia's Energy Market Perspective Our quarterly Energy Market Perspective contains an analysis of indicative capacity at REZ zones throughout the NEM.  The following assessment for NSW is from our latest edition. Request Energy Market Perspective call back The strategic development of Renewable Energy Zones (REZs) in New...


Capacity Investment Scheme boosted from 6GW to 32GW

From Cornwall Insight Australia's Energy Market Alerts service Last Friday, the Commonwealth announced a major boost to the Capacity Investment Scheme, with the scheme now expected to deliver 32GW (combination of 9GW firming capacity and 23GW renewable generation) – up from 6GW. Cornwall Insight Australia has released an Energy Market...


What are Australia’s emissions reduction targets?

From Cornwall Insight Australia's Energy Market Alerts service Energy laws have now been amended to incorporate an emissions reduction objective alongside the other objectives. The list of targets that the market bodies will need to consider is listed in a separately published Targets Statement. The targets currently listed cover both...


Energy prices tumble in October

From Cornwall Insight Australia’s NEM Market Analysis report With over 700 GWh of rooftop PV added to the NEM since October last year, records were again set in NEM minimum demands along with a high instantaneous renewable penetration within the grid of 71.4%. Once again, the month’s main story was...


Emissions intensity drops for October 2023

From Cornwall Insight Australia’s NEM Market Analysis report This October saw a 12.6% reduction in total emissions (accounting for -1.18 Mt CO2-e reduction) as solar and wind generation has increased significantly. The reduction in emissions may continue with the arrival of Fly Creek and Rye Park wind farms expected soon...