Assessment of Summer Preparedness for the NSW Energy Market

In 2017 the Minister for Energy and Utilities established a NSW Energy Security Taskforce to look at how NSW manages energy security and resilience, including readiness, planning, preparation and response capability to extreme events such as weather. The Taskforce released its initial report on 22 May 2017 and its final report on 19 December 2017.

The initial report focused on the actions that could be implemented to deal reliability and security risks for the 2017/18 summer and the final report looked at the longer-term resilience of the NSW electricity systems.

In October 2018, the Minister for Energy and Utilities, requested that the NSW Chief Scientist & Engineer chair a panel to assess the adequacy of the state’s 2018/19 summer preparedness in relation to the energy market and associated emergency management, and identify any actions for emerging risks in 2018/19 summer and beyond.

The Panel reviewed the Department of Planning and Environment's Summer Readiness Action Plan and the NSW Government's responsibilities and levers in the energy market and emergency management.

The Panel concluded that the NSW Government was well prepared for the 2018/19 summer, noting that protocols and exercises by the Department of Planning and Environment, other NSW Government agencies and industry stakeholders have improved summer readiness and energy emergency response over the previous 12 months. The Panel also made eight recommendations to the NSW Government for summer 2018/19, summer 2019/20 and medium to longer term considerations.

NSW is generally well placed to deal with electricity reliability and security risks. However, adequacy of electricity supply is at heightened risk during extreme weather events, such as heatwave conditions, lost/reduced output of forecast generation output and the reliability of ageing thermal generation plants.

The NSW Government is seeking expert advice from the NSW Chief Scientist & Engineer on risks within the national electricity market, especially in relation to summer. This will build on the work of national bodies and focus on opportunities for the NSW Government to take further action to maintain the reliability of supply in the State.

Scope of review

The review will:

  1. provide an assessment by 30 October 2019, that:
    1. synthesises work undertaken by the Australian Energy Market Operator (AEMO) and other national bodies in relation to the supply and demand outlook in NSW, including the adequacy of firm generation, transmission and demand response;
    2. considers national measures, ongoing work by AEMO and other market bodies, and current NSW Government actions, to address energy reliability and security risks;
    3. builds on previous NSW Chief Scientist & Engineer assessments of summer preparedness of the NSW energy market and reviews the work completed by the NSW Government in response to the recommendations from those reports;
    4. identifies any emerging risks for the 2019/20 summer and makes recommendations on actions to address any vulnerability identified; and
    5. examines opportunities for enhanced working relationships between AEMO, TransGrid and the NSW Government regarding energy emergencies.
  2. Upon request, provide an update to the assessment and yearly thereafter to 2023, that:
    1. accounts for market developments, ongoing monitoring and work from national bodies, including updates to AEMO's Integrated System Plan (ISP) and Electricity Statement of Opportunities (ESOO);
    2. includes ongoing assessments of summer preparedness for the NSW energy market; and
    3. identifies any emerging risks for NSW and makes recommendations on actions to address any vulnerability identified.

In undertaking this work, an expert Panel as well as staff selected by the NSW Chief Scientist & Engineer will consult with, and consider work being undertaken by, the NSW Government and other relevant organisations including TransGrid, AEMO, the Australian Energy Regulator, the Australian Energy Market Commission and the Energy Security Board.

Process

The Panel is to provide a report by 30 October 2019 and upon request, provide updates to the review yearly thereafter to 2023. There is significant work being undertaken by AEMO. The Panel should draw on this work where possible and focus on areas particularly related to NSW.

2018/19 Assessment of Summer Preparedness for the NSW Energy Market

In October 2018, the Hon. Don Harwin MLC, Minister for Energy and Utilities, wrote to the Hon. Niall Blair MLC, Minister for Trade and Industry, requesting that the NSW Chief Scientist & Engineer chair a panel to assess the adequacy of the state’s 2018/19 summer preparedness in relation to the energy market and associated emergency management.

The purpose of the Panel and the review it undertook have particular regard to the Department of Planning and Environment’s Summer Readiness Action Plan and the NSW Government’s responsibilities and levers in the energy market and emergency management, and identify any actions for emerging risks in 2018/19 summer and beyond.

The Panel and secretariat consulted with the Australian Bureau of Meteorology (BOM), the Australian Energy Market Operator (AEMO), network operators and jurisdictions on their summer readiness. The Panel examined issues including:

  • Estimates of unserved energy (USE) and other information sources to examine the likelihood of a Lack of Reserve event
  • Weather and climate effects that could impact supply and demand over the coming summer
  • Systems and protocols that are in place to respond and manage the electricity system over the coming months in particular the summer readiness plans of the Department of Planning and Environment (DPE) and the Australian Energy Market Operator (AEMO).

The Panel concluded that the NSW Government is well prepared for the coming summer, noting that protocols and exercises by the Department of Planning and Environment, other NSW Government agencies and industry stakeholders have improved summer readiness and energy emergency response over the past 12 months.

Whilst the overall risk of USE, as assessed by AEMO, is low for NSW for 2018/19 and well within the reliability standard, there are a number of risks that can impact on the security and availability of the electricity system, which the Panel notes have been considered by the relevant industry participants.

In assessing the adequacy of the NSW Summer Readiness Action Plan, the Panel has made several recommendations. The Panel report outlines these recommendations, an assessment of energy margins for NSW in summer 2018/19, assessment of the DPE’s procedures in the NSW Summer Readiness Action Plan and factors that may influence future summer preparation.

The Panel report was released on 28 December 2018 and is available here.