Article by Editorial, courtesy of The Australian
01.12.2025
Banking on technology that is hard to buy and yet to be proven at scale is no way to run a First World electricity network. But this is the plan for authorities and governments who are watching the red lights flash on the nation’s energy control panel.
The Australian Energy Market Operator has warned it may be forced to dramatically increase the times it must intervene in the market and force gas and coal generation to operate to maintain the electricity grid. It may need “to direct the de-energisation of sections of the transmission network, resulting in localised loss of supply to customers”. In plain English, this is a brownout.
Intervention is needed to avoid situations like the catastrophic blackout in Portugal and Spain in April where the entire grid collapsed because it could not run on renewables alone. AEMO chief executive Daniel Westerman has said that in 2024 AEMO had to intervene in the market 1800 times, up from six manual interventions to maintain a secure grid in 2016 and 321 interventions in 2020. In its latest warning, AEMO said it may need to intervene as much as 30 per cent of the time, which would impose “substantial cost” on consumers.
This is the hidden cost of the renewable energy transition that Energy Minister Chris Bowen insists makes sense because wind and sunshine are free. Energy experts in the UK argue that system costs are now the main driver of bills and, unlike with thermal power systems, will keep rising as more renewables are added.
This is the direction the Australian electricity network is heading. The Australian Energy Market Commission warned in April that system security risks were emerging faster than expected. It has now increased the urgency of its warnings that investment is needed in alternative methods to provide inertia, frequency control and system strength that has historically been provided by coal-plant turbines for free.
It is now clear that AEMO’s technology plan remains uncertain despite the urgency of the need. On Monday, the Australian Energy Council said the AEMO report highlights the risks of relying heavily on a single technology, in the form of synchronous condensers, to deliver the essential system services needed to ensure the integrity of the grid.
“In the short term, synchronous condensers can provide good support to the system but they have faced delays and availability issues,” the Energy Council said. It supports trials into a range of technologies, such as grid-forming inverters, gas-fired generators with clutches and large inverter-based loads and has called for “an inertia market” to offer more options.
The challenge is to keep the lights on but the risk is in repeating the UK experience, where the high cost of maintaining a renewable energy-heavy grid undermines the perceived cost and commonsense advantage of turning away from baseload power in the first place.
With the hydrogen bubble having burst and the pipeline of large-scale renewable energy projects at a standstill, fingers are pointed at the failure of government to deliver the high-voltage transmission lines that are dividing rural communities around the nation.
For politicians, home batteries have replaced wind turbines as the thing to point to to assure voters that the transition to renewables remains on track. But home batteries are hugely expensive, heavily subsidised and not a real solution to the problems of system stability and grid security that will reach crisis point as coal-fired generators leave the system.
Battery installations are currently running at about 1800 a day and now total 136,000 batteries since the launch of the nationwide rebate in July. This is only a small fraction of households with solar panels but it is costing taxpayers billions of dollars. And the reality for grid planners and power utilities is that many of the often wealthy individuals and households who can afford to install subsidised batteries do not want to make them available to the grid planners.
Rather, they want to use home batteries as a personal insurance policy against the high cost and grid chaos that have been caused by poor planning. This warning has been clearly made by the nation’s biggest power utilities.
The bottom line is that AEMO has only begun to grapple with the complexities and cost of depending on a network of hundreds of thousands of connection points to manage a virtual grid of Consumer Energy Resources. AEMO is now covering its tracks and will say its warnings to government were made. The buck stops with Mr Bowen, who must urgently take stock of whether what he is promising is even possible to deliver.