<article><p class="lead">Falling grid consumption and increased use of rooftop solar panels means no new power generation is required within the National Electricity Market (NEM) covering Australia's eastern states. </p><p>The NEM has surplus capacity of 7,500MW based on electricity demand for the 2014-15 fiscal year ending 30 June, according to the latest annual Electricity Statement of Opportunities (ESOO) by the Australian Energy Market Operator (Aemo). This equates to about 15pc of installed capacity of 50,289MW based on Aemo estimates. The combination of surplus capacity and the lack of demand for new generation capacity reduces demand for new gas-fired or coal-fired power plants. </p><p>This is the first time that no new capacity is required for the NEM since it was formed in 1998, Aemo said. Based on three scenarios of low demand, medium and high demand, Aemo does not see any new generation capacity to provide reliable electricity supply for each of the five states that comprise the NEM — Queensland, New South Wales (NSW), Victoria, South Australia and Tasmania — until 2024.</p><p>There is potentially between 7,650MW and 8,950MW of surplus capacity across the NEM in 2014-15, of which about 90pc is in NSW, Queensland and Victoria that are dominated by coal-fired generation.</p><p>Aemo still predicts grid-based electricity consumption to reverse its falling trend and resume growth during the period to 2023-24. Even if power consumption rises, a surplus of electricity will remain. Aemo estimates between 1,100MW and 3,100MW of capacity could be withdrawn from each of NSW, Queensland and Victoria without breaching the reliability standard.</p><p>NSW, the largest state consuming market within the NEM, has the largest surplus capacity in absolute terms. This is around 2,800MW and 3,100MW, or 17-18pc of the state's installed capacity of 16,932MW, based on 2013 data by the Australian Energy Regulator.</p><p>Queensland has the largest surplus capacity in relative terms with between 2,200MW and 2,850MW of excess capacity, or between 19pc and 24pc of the state's installed capacity of 11,703MW. The majority of Queensland's power generation capacity is state controlled, with the ruling conservative state government seeking a mandate from next year's state elections to sell state-owned power assets.</p><p>The reasons for reduced electricity consumption in 2013-14 to 2016-17 include the decline in energy-intensive industries, including the closure of the Point Henry aluminium smelter in Victoria last month and strong growth in rooftop solar panel use. This is projected to rise by an average of 24pc between the 2013-14 to 2016-17 period, with strong growth in total energy efficiency savings of an average of 10pc/yr over the same period, Aemo said.</p><p>Since the 2013 ESOO report a year ago, 170MW of new generation capacity was commissioned, the Musselroe wind farm in Tasmania, and 1,385MW of thermal base-load generation capacity was mothballed, Aemo said.</p><p>There is a further 1,165MW of capacity expected to commissioned during July 2014 and January 2016, which is mainly wind power and solar farms. A further 25,329MW of proposed new generation capacity is in the planning stage with 58pc being wind power, 25pc gas, 8pc coal, 4pc solar and 2pc hydropower and a further 3pc of other forms of power generation, Aemo said.</p><p>The Australian government is reviewing the renewable energy target of obtaining 20pc of electricity generation from renewable sources by 2020.</p><p>km/rjd</p></article>
