2023澳洲基建投资目标草案-57页-WN7.pdf
Draft 2023 Infrastructure Investment Objectives ReportMay 2023 AEMO Services 2023|2023 IIO Report2Important noticePURPOSEAEMO Services Limited(AEMO Services)publishes this Draft 2023 Infrastructure Investment Objectives Report for the purpose of consulting with market,consumer and other stakeholders.AEMO Services Limited(AEMO Services)publishes the 2023 Infrastructure Investment Objectives Report(IIO Report)pursuant to its functions as Consumer Trustee under section 45(1)(2)of the Electricity Infrastructure Investment Act 2020(NSW).DISCLAIMERThe contents of this document are for information purposes only.This document is not intended to provide any advice or imply any recommendation or opinion constituting advice.This document may include inputs and assumptions that are not necessarily current as at the date of publication.The Draft 2023 Infrastructure Investment Objectives Report reflects a draft for the purposes of consultation.Until such time as it is published in final,the 2022 Infrastructure Investment Objectives Report remains the most recent Infrastructure Investment Objectives Report.In preparing the Final Report,AEMO Services will consider submissions and any further relevant information it is required to consider.AEMO Services has taken care in the preparation of the information contained or referred to in this document but cannot guarantee its accuracy or completeness.Accordingly,to the maximum extent permitted by law,AEMO Services and its officers,employees and consultants involved in the preparation of this document:do not give any warranty or make any representation,express or implied,as to the completeness,accuracy,adequacy or correctness of the information contained or referred to in this document;and expressly disclaim any and all liability relating to or resulting from:the use of,or reliance on,such information by any person;or the exercise of any discretion,or the making of any decision,by AEMO Services as the Consumer Trustee in relation to the information contained or referred to in this document.VERSION CONTROLVersionRelease dateChanges1.016 May 2023ACKNOWLEDGMENT OF COUNTRY AEMO Services acknowledges the Traditional Owners of Country throughout Australia and recognises their continuing connection to land,waters and culture.COPYRIGHT 2021 AEMO Services.The material in this publication may be used in accordance with the copyright permissions on AEMOs website.AEMO Services 2023|2023 IIO Report3ContentsAbbreviations.6Invitation to engage.8At a glance .9Executive Summary.101.Introduction.161.1 Background.161.1.1 Roadmap and Consumer Trustee .161.1.2 Infrastructure Investment Objective Reports.161.1.3 Previous IIO Reports.171.2 Context for 2023 Infrastructure Investment Objective Report.171.2.1 Market developments.171.2.2 Relationship to Integrated System Plan.181.2.3 Relationship to Network Infrastructure Strategy.181.2.4 Limitations.202.Infrastructure Investment Objectives.212.1 Overview.212.2 Minimum objectives.222.2.1 Generation infrastructure.222.2.2 Long-duration storage infrastructure.222.2.3 Firming infrastructure.222.3 Overall objectives.232.3.1 Minimising costs to NSW customers.232.3.2 Meeting the reliability standard.232.3.3 Meeting the energy security target.242.3.4 Network infrastructure.242.4 Progress in achieving the minimum objectives.252.5 Outcome of tenders since previous report.253.Draft Development Pathway.263.1 Overview and considerations .263.2 Part of a broader energy system.273.3 Generation infrastructure.273.4 Long-duration storage infrastructure.293.5 Firming infrastructure.313.6 Network infrastructure.333.7 Costs for the supply of wholesale energy services to NSW electricity customers.35 AEMO Services 2023|2023 IIO Report44.Draft 10-Year Plan.384.1 Overview.384.2 Generation infrastructure.384.3 Long-duration storage infrastructure.394.4 Firming infrastructure.404.5 Adjusting the 10-Year Plan over time.415.Determining the Draft Development Pathway.425.1 Overview of market modelling.425.2 Minimising consumer costs.435.3 Scenarios.445.3.1 Four scenarios.445.3.2 Scenario input assumptions.455.4 Comparing the scenarios .475.4.1 Build trajectories.485.4.2 Comparison of cost outcomes.515.4.3 Comparison of emissions profiles.525.4.4 Co-optimised network augmentation scheme.535.5 Selecting a Draft Development Pathway.545.6 Resilience to lulls in variable renewable energy sources.555.6.1 Indicative resilience assessment.555.6.2 Proposed 2023 resilience to VRE lulls methodology.556.Consultation and next steps.566.1 Consultation overview.566.2 Guidance on written submissions.57 AEMO Services 2023|2023 IIO Report5FiguresFigure 1:Draft Development Pathway(Generation).11Figure 2:Draft 10-Year Plan(Generation).12Figure 3:Draft Development Pathway(Long-duration storage).12Figure 4:Draft 10-Year Plan(Long-duration storage).13Figure 5:Draft Development Pathway(Firming).14Figure 6:Draft 10-Year Plan(Firming).14Figure 7:Infrastructure investment objectives and eligible infrastructure.21Figure 8:Forecast installed capacity in NSW over time.27Figure 9:Draft Development Pathway-Annual(Generation).27Figure 10:Draft Development Pathway-Cumulative(Generation).28Figure 11:Comparison of Draft Development Pathway to 2022 Development Pathway(Generation).29Figure 12:Draft Development Pathway-Annual(Long-duration storage).29Figure 13:Draft Development Pathway-Cumulative(Long-duration storage).30Figure 14:Comparison of Draft Development Pathway to 2022 Development Pathway(Long-duration storage).31Figure 15:Draft Development Pathway-Annual(Firming).31Figure 16:Draft Development Pathway-Cumulative(Firming).32Figure 17:Comparison of Draft Development Pathway to 2022 Development Pathway(Firming).32Figure 18:Scheme(LTESA)cost illustration via an example of revenues and costs for single 100 MW pumped hydro project.38Figure 19:Forecast of annual costs for the supply of wholesale energy services to NSW electricity customers(2024-2043).38Figure 20:Draft 10-Year Plan(Generation).39Figure 21:Draft 10-Year Plan(LDS).40Figure 22:Draft 10-Year Plan(Firming).41Figure 23:Overview of IIO Report modelling steps.43Figure 24:Comparison of alternative development pathways(generation).48Figure 25:Comparison of alternative development pathways(long-duration storage).49Figure 26:Comparison of alternative development pathways(firming).50Figure 27:Present value of forecast costs by scenario.51Figure 28:Comparison of modelled NSW emissions profiles.52TablesTable 1:Public consultation events.15Table 2:Tender one projects .25Table 3:REZ network and priority transmission infrastructure projects underpinning the Draft Development Pathway.34Table 4:Current or actionable ISP projects underpinning the Draft Development Pathway.35Table 5:Cost components included in forecast of costs for provision of wholesale energy services to NSW customers.36Table 6:Key modelling assumptions.45Table 7:Key modelling assumption diversions from the 2022 ISP.46Table 8:Assumed timing of network augmentations(financial year ending).47Table 9:Modelled optimal timing of REZ network infrastructure projects(financial year ending).53Table 10:Publication consultation events.56 AEMO Services 2023|2023 IIO Report6AbbreviationsTermMeaningAEMOAustralian Energy Market OperatorCO2-eCarbon dioxide equivalentCWOCentral-West OranaDraft Development PathwayUpdated Development PathwayDraft 10-Year PlanUpdated 10-Year PlanEII RegulationsElectricity Infrastructure Investment Regulation 2021(NSW)EII ActElectricity Infrastructure Investment Act 2020(NSW)EnergyCoEnergy Corporation of NSWESOOAEMOs Electricity Statement of Opportunities2022 ESOOAEMOs 2022 Electricity Statement of Opportunities dated 31 August 2022ESTEnergy Security TargetEST MonitorEnergy Security Target Monitor2022 ESTM Report2022 Energy Security Target Monitor Report dated 28 October 2022Firming DirectionDirection by the Minister under section 47(2)of the EII Act to conduct a competitive tender for LTESAs for firming infrastructureHCCHunter-Central CoastIASRInputs,Assumptions and Scenarios Report2021 IASRAEMOs 2021 Inputs,Assumptions and Scenarios Report dated 30 July 2021IIO Report(s)Infrastructure Investment Objective Report(s)2021 IIO Report2021 Infrastructure Investment Objective Report dated 7 December 20212022 IIO Report2022 Infrastructure Investment Objective Report dated 2 December 20222023 IIO Report2023 Infrastructure Investment Objective Report ISPAEMOs Integrated System Plan2020 ISPAEMOs 2020 Integrated System Plan dated 30 July 20202022 ISPAEMOs 2022 Integrated System Plan dated 30 June 2022LDSLong-duration storageLTESA(s)Long-term energy services agreement(s)Minimum objectivesThe minimum infrastructure investment objectives established by section 44(3)of the EII ActMinisterNSW Minister for Energy AEMO Services 2023|2023 IIO Report7TermMeaningNEMNational Electricity MarketNERNational Electricity RulesNISNetwork Infrastructure StrategyOECCNSW Office of Energy and Climate ChangeOverall objectivesThe overall infrastructure investment objectives established by section 44(2)of the EII ActQED Q3 2022AEMOs Quarterly Energy Dynamics Q3 2022QNIQueensland to NSW InterconnectorRES Board PlanRenewable Energy Sector Board PlanREZ(s)Renewable Energy Zone(s)RoadmapNSW Electricity Infrastructure RoadmapUSEUnserved energyVNIVictoria to NSW interconnectorVREVariable renewable energy AEMO Services 2023|2023 IIO Report8Invitation to engageThe Infrastructure Investment Objectives Report(IIO Report)serves dual purposes.It sets out a least-cost pathway for developing new electricity infrastructure in NSW that meets legislative objectives,so that consumers,communities,and industry can understand and plan for the energy transformation with confidence.Critically,it also seeks to operationalise this pathway by providing developers and investors with a forward view of opportunities to secure financial support through regular tenders over the next 10 years.It demonstrates that AEMO Services,with our NSW Government partners,is committed to delivering built energy.This draft report builds on our two previous IIO Reports,calling for consistent investment over the 2020s to meet NSWs minimum targets as quickly as possible.Beyond 2030,it calls for significantly greater investment in new renewable generation infrastructure than previously forecast,in order to minimise costs for NSW electricity customers.Due to the rapid pace of the energy transition in NSW,the assumptions underpinning the modelling contained within this report are fast becoming outdated.The modelling,for example,does not include the recent announcements of delays in committed projects such as Snowy 2.0,and project developments,such as the first stage of a large-scale battery at the Eraring Power Station.Notwithstanding,we are seeking to engage on the pathway but more importantly our underpinning methodology so that feedback can be incorporated in the final version of this 2023 IIO Report published in December.As we prepare to update our modelling and publish the final version,we welcome constructive and critical input from our stakeholders.We are hosting public forums during May 2023 and intend to run deep dive sessions in June 2023 based on your feedback regarding topics of interest.I also encourage you to make a written submission.Details of the consultation process are set out in section 6 of this draft report.We look forward to your feedback.Paul Verschuer Executive General Manager AEMO Services 2023|2023 IIO Report9At a glance Supporting consistent,strong investment in electricity infrastructureThe IIO Report is issued every two years to set out NSWs 20-year pathway for investment in new electricity infrastructure,alongside a 10-year plan for conducting tenders for long-term energy service agreements(LTESAs)to support that infrastructure.While the 2022 IIO Report focussed on near-term reliability needs,the Draft 2023 IIO Report leverages updated forecasting assumptions and methodologies to provide a clearer indication of NSWs long-term electricity infrastructure needs.1The draft development pathway in this report seeks to deliver affordable,reliable,secure and sustainable electricity to NSW customers,assuming a scenario that is broadly consistent with AEMOs ISP Step Change scenario.The draft tender plan provides the market with regular opportunities to secure financial support over the next 10 years.The tenders are anticipated to support 3,000 GWh of annual generation every six months and up to 1 GW of long-duration storage capacity every year until we hit our 2030 targets.Generation:The equivalent of 3,000 GWh of annual generation every six months NSW has a legislated minimum target for the construction of renewable generation capable of producing 33,600 GWh of electricity every year by 2030.To achieve this,AEMO Services will conduct biannual tenders with the aim of supporting 3,000 GWh of annual generation each tender,and is agnostic as to the location and mix of that generation.AEMO Services view is that this scale of investment is needed across all reasonable assumptions for future demand,coal plant retirements and network infrastructure delays.From 2030 through to 2043,significantly more renewable generation than forecast in the 2021 and 2022 IIO Reports will be needed to maintain downward pressure on prices for NSW electricity customers.The increased amount of generation infrastructure in the second decade is the result of several factors,including increased electricity demand and earlier NSW coal generator retirements.Long-duration storage:Technology readiness to be tested through annual tenders NSW has a legislated minimum target for the construction of 2 GW of long-duration storage by 2030.This is not likely to be delivered until the late 2020s,later than forecast in the 2022 IIO Report(due to updated assumptions regarding pumped hydro lead times and battery costs).However,these assumptions are highly uncertain and AEMO Services will continue to test them through annual tenders from 2023 to 2028.This may reveal that pumped hydro projects will be ready earlier and/or that other technologies are cost competitive.Firming:Only one tender planned at this stage AEMO Services has launched a tender for an indicative minimum of 380 MW of firming infrastructure in Q2 2023.2 AEMO Services considers that at least this much firming infrastructure capacity along with 2 GW of long-duration storage delivered by 2030,is needed to meet NSWs reliability needs through to 2040.This view is consistent with the 2022 IIO Report and no other tenders are currently expected unless there are major market events,(e.g.delays in critical transmission infrastructure projects or announcements of early coal-fired power station closures).The proposed tenders for generation and long-duration storage are more regular than planned in the 2022 IIO Report,to provide greater consistency and certainty for the market.However,AEMO Services may recommend more or less LTESAs than the target volumes
