Energy transition

The electricity system is transitioning away from coal and towards renewables at an accelerating rate – even faster than expected. Transgrid remains focused on ensuring that energy supplies continue to be safe, secure and reliable for consumers throughout the energy transition. In FY22, we developed a System Security Roadmap to support the rapid transition we anticipate, ensuring system security capabilities, assets and services will be in place when they are needed.

By 2025, AEMO forecasts that the NEM could experience periods with up to 100% instantaneous renewable energy penetration. This will be rare at first but, by 2030, dispatch periods at 100% renewables are forecast to be quite common. Recognising we need to be ready for these conditions when they appear, during the year, Transgrid has set a goal to ‘lead the implementation of a transmission system capable of operating at 100% instantaneous renewable generation by 2025 to safely deliver reliable energy to consumers’.

The power system is becoming more distributed, dynamic and unpredictable, and increasingly complex to operate. Looking ahead, system operators will need better planning capabilities and tools to support decision making in real time. As part of the System Security Roadmap, Transgrid identified the new tools and capabilities needed to ensure our control rooms continue to be fit-for purpose to operate securely and reliably, and how they must evolve to reflect the changing composition of the power system. We have now commenced designing and delivering these tools.

The power system currently relies on a certain number of coal or gas generation units being online at all times to keep the system operating securely. These units, which provide critical system security services, are starting to retire and operate less frequently. By 2024-25, AEMO forecasts there may be periods when the minimum coal units required for system security in NSW, will not be available.

In FY22, we accelerated our efforts to develop system strength from other sources, planning how we will decouple system security from thermal generation - building resilience by ensuring system security services are always available, even when thermal units are offline.

In FY22, we selected a new type of renewable energy and storage mini-grid to provide backup power supply to Broken Hill, instead of using conventional diesel generators. The new mini-grid will use compressed air storage in a disused mine, in conjunction with existing local wind and solar generation. This initiative will be an Australian first and one of the largest renewable mini-grids to be created worldwide. It’s expected to create at least 260 construction jobs and a further 70 ongoing permanent roles.

During the year, our people continued to come up with innovative solutions to get more out of our existing energy infrastructure. For example, the Victoria-NSW Interconnector upgrade will unlock an extra 170MW of additional energy to the NSW grid, enough to power 30,000 customer homes. Instead of building new ‘poles and wires’, we are installing SmartValve units. The system works by detecting areas of congestion in the network and automatically redirecting flows to less congested lines, helping remove bottlenecks on the grid.

This is the first time SmartValve technology has been deployed on a 330kV network, on a large scale, in the Southern Hemisphere. The project was significantly less expensive and faster than the alternative of building or upgrading a transmission line.

In FY22, Transgrid continued to trial the use of grid-scale batteries. In December 2021, the first large-scale grid battery in NSW began operation at our Wallgrove substation in Western Sydney.

We are using the Wallgrove battery to provide synthetic inertia services, while renting the rest of the battery to a market participant to trade in the wholesale energy and ancillary services markets.

By ‘value stacking’ co-optimised services, we will drive efficiencies and reduce costs for consumers. In late 2022, we expect to commission ‘Virtual Machine Mode’ on the battery, when we start testing and verifying its capabilities to provide system security services. If successful, we hope to demonstrate that batteries may be able to provide these services at a lower cost than other technology options.

During the year, we also identified opportunities to use grid-scale Battery Energy Storage Systems (BESS) to reduce or defer the need for new poles and wires. BESS deliver services more quickly than conventional transmission infrastructure can be deployed, avoiding the risk of supply outages in the short term.

At year end, areas where a BESS had been identified as part of the preferred option to maintain a reliable electricity supply included:

• Bathurst, Orange and Parkes – Batteries at substations at Panorama and Parkes can help to manage voltage variations during high demand periods.
  
  
• NSW North West Slopes region – A battery in the Gunnedah area can manage thermal constraints and voltage variations during high demand periods.
  
  
• South-Western NSW – A three-year contract, with a BESS currently in development in the area, can provide network support services in the interim while a new transmission line is constructed and commissioned.

These projects are among the first in the NEM where solutions involving large-scale batteries have outperformed other options throughout the regulatory test (without subsidies).