The Australian Energy Market Operator (AEMO) today released updated reliability forecasts for the National Electricity Market over the next 10 years, warning that “urgent investment” is needed to shore up Australia’s electricity reliability.

The report forecasts a 35-megawatt “reliability gap” between energy supply and demand in South Australia in the summer of 2026-27. That would increase to 305-megawatts if there was a significant heatwave.

Energy and Mining Minister Tom Koutsantonis said the shortage was “relatively small” and South Australia will “certainly” not suffer from blackouts as a result.

“I am convinced that (35 megawatts) is easy to procure,” he told FIVEaa this morning.

“But if we get a one in ten year hot summer, our shortage is 300 megawatts – so that’s a bit more difficult.”

The AEMO report forecasts bigger reliability problems in Victoria and New South Wales, with the latter facing a 510-megawatt gap next financial year or 1040 megawatts in a hot summer scenario.

It said the increased reliability risks were due to the mothballing of South Australia’s Torrens Island B1, Port Lincoln and Snuggery power stations from 2024-25 onwards.

The Port Lincoln and Snuggery power stations have 73.5 and 84 megawatts of capacity respectively and are due to be mothballed on July 1.

“This reduction in peak generation capacity has increased reliability risks from 2024-25 onwards jointly in South Australia and Victoria, which are often tightly interconnected regions for reliability purposes,” the AEMO report states.

The 200-megawatt Torrens Island B1 station has already been mothballed and will not be restarted ahead of the plant’s full closure in 2026, operator AGL advised in September, heightening AEMO’s risk forecasts.

There are also delays to the New South Wales portion of the electricity interconnector with South Australia which have increased reliability risks.

The $2.4 billion interconnector will allow South Australia to export excess renewable energy to New South Wales and import electricity from the NSW grid, but its completion has been pushed back from July 2026 to July 2027.

The full Torrens Island B power station and the Osborne Power Station are due to close in 2026/27, although this was already factored into AEMO’s earlier forecasting.

AEMO said the power station closures combined with the interconnector delays “result in increased reliability risks… in South Australia in 2026-27”.

But the energy operator also indicated that the state government’s investment in a $593 million hydrogen powered generator in Whyalla would at least partially offset the reliability risks.

Work on the renewable plant is expected to begin in the second half of 2024 and completed by early 2026. AEMO has included it in its forecasts from 2026-27.

Koutsantonis said the AEMO report showed the hydrogen power plant was coming online “just in time”.

“If we didn’t have that generator, you would see shortfalls next summer,” he said.

“It just shows you how important it is to have a government reserve of power in the system to make sure we can fill the gaps that the private market doesn’t fill.

“Because the market will only invest to make money.”

Opposition spokesperson for energy and net zero Stephen Patterson said South Australia’s electricity grid was becoming “increasingly less reliable”.

He also said the year-long delay to the SA-NSW interconnector, a key plank of the former Marshall Government’s energy policy, was “extremely disappointing”.

“We also know that any thermal generation being removed from the grid is significant, and in the midst of a cost-of-living crisis, less electricity being made available can only make electricity prices worse,” he said.

“We need to have all power generation options on the table which is why the Opposition has been calling on Labor to initiate a non-ideological, open-minded investigation into nuclear energy generation in South Australia.”