The Northern Territory has so far been spared from the energy crisis facing the east coast during a frosty winter, largely because the jurisdiction is powered by an isolated power grid backed by a long term supply agreement†
But a new report from the local industry regulator has quietly warned that the area will face serious hurdles of its own as an aging energy system accustomed to running on gas transitions to a solar-powered, renewable future.
The Utilities Commission’s outlook report compared forecasted energy demand to the current state of the industry, which saw energy sources cut off and new investments funded over the next 10 years.
The alarming prognosis is that an “increased risk of power outages” could become a reality in the NT’s largest population centers in about five years’ time.
Experts say the report is a warning that now is the time to invest in a renewable future — particularly by preparing the grid for more solar energy.
What’s the problem?
The area’s energy sector is already undergoing a significant transition from gas and diesel to residential and large-scale solar, as the NT government works to meet a target of 50 percent renewable energy by the end of the decade.
But the report said the area’s unique context — with small, isolated energy systems and a heavy reliance on solar as a renewable energy source — is part of the reason it could soon struggle to keep the lights on.
The report outlines three “major risks” facing the system.
In fact, it said it faced the same three risks last year and that “limited progress” has been made in the 12 months since.
- The retirement of six gas-fired generators in Darwin and three in Katherine from 2026
- The need for the government to accelerate electricity market reforms, including some aimed at supporting the renewable energy target
- Predict generation capacity shortages – i.e. how much energy a system can produce – to meet system security requirements in Darwin/Katherine and Alice Springs
The report’s authors warn of an increased risk of outages from 2026-27 in Alice Springs and the following fiscal year in Darwin and Katherine.
“This indicates an urgent need to invest in next-generation, storage and/or demand response,” the report said.
Some issues with the local switch to renewables are already well publicized – including: the case of four Top End solar farms that were recently inactive long after they were built†
Will my energy bill go up?
The paper also makes no secret of the fact that power generation could become more expensive without urgent action, or at the very least lead to hasty decisions.
Although the NT government is setting maximum prices for retail electricity in NT, consumers may be affected in some way by the problem.
“Delays in addressing emerging challenges and opportunities mean less time to respond, which can increase risks and costs and ultimately negatively impact the area’s electricity consumers and taxpayers,” the report said.
Jason Fowler, who specializes in energy at the Environment Center NT, said the obvious solution was to invest in technology that could use renewable energy to keep the system safe.
“We need to invest in big batteries and system control now, and that’s an investment in the future, which means we’ll have lower power prices,” he said.
“The main reason for this is that our network’s operating costs will decrease over time as we move to renewable energy.”
Ironically, the NT government’s recent decision to reduce feed-in rates for solar energy – reducing the amount paid to consumers for feeding electricity back into the grid – the report credits with improving grid stability.
That’s because more people are now expected to use that solar energy around the home instead of feeding it back to the grid, slowing down some of the energy security issues associated with the rapid shift from gas and diesel generation. .
Individually hard work to fracking the gas-rich Beetaloo Basinbut it’s unclear how much of the region’s gas will be set aside for local use.
What are the solutions?
Since the latest outlook, both the government and the area’s electricity producer have released plans that chart the path to a renewable future.
from the government plan relies in particular on new large-scale solar generators and new large-scale batteries to bring the Darwin-Katherine electricity grid towards the 2030 target.
The Utilities Commission acknowledged these plans but took a “business as usual” approach to the outlook and deliberately excluded some of them from its latest report.
It said plans that were not fully funded or particularly ambitious did not provide “sufficient assurance” that they would address the various challenges facing the local network.
Mr Fowler praised the government’s work so far but said the Utilities Commission had mandated it to back it up with investment.
“It highlights how the minister should come up with this and actually put some money into handing over our grid so that it’s ready for renewable energy,” he said.
Posted † updated
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