The purpose of this study has been to address three key questions: a) What combination of generation, transmission and storage technologies will achieve the least cost transition from existing infrastructure to a low carbon economy by 2050, and b) How effectively will the National Energy Market (NEM) function under this new mix of technologies, and is a re-design on the market going to be required. c) What is the value of distributed generation and storage technologies?
Report extract
In this project we developed a suite of modelling tools that were used to investigate the questions:
- What combination of generation, transmission and storage technologies will achieve the least cost transition from existing infrastructure to a low carbon economy by 2050,
- How effectively will the National Energy Market (NEM) function under this new mix of technologies, and is a re-design on the market going to be required, and
- What is the value of distributed generation and storage technologies?
These models included three separate but complimentary energy systems models for finding the least cost combination of available generation technology to meet demand while constrained by various emission reduction targets. The approach is technology agnostic, with costings for various technologies taken from published reports such at the Australian Energy Technology Assessment (BREE, 2013) and the National Transmission Network Development Plan (AEMO, 2015). The second part of the study involved market models that simulated the behaviour of the NEM with the technology mix determined in the first part of the question. These models showed that with higher penetrations of wind and solar PV, market volatility increased. However the different approaches from the project partners resulted in different conclusions as to whether the current market rules would allow the market to continue to function. This remains a contentious are of research and more detailed work is required to assess the best options for the NEM design going into the future.