Ensuring the future of Victoria's Electricity Supply

The Victoria Energy Policy Centre at Victoria University has released a report on whether markets and regulations will ensure reliable electricity in Victoria over the coming decade.

The report, Ensuring reliable electricity supply in Victoria to 2028: suggested policy changes, examines the power system to understand the effect of renewable electricity expansion, and the possible closure of Alcoa’s Portland smelter.

The market modelling finds that several black-coal generators will close much sooner than has been announced. Report co-author Dr Steven Percy (VEPC) noted that subsidies to keep black-coal generators in the market will drive out Victoria’s brown-coal generators.

The modelling also finds that while production from Victoria’s brown-coal generators is robust in relation to renewable generation growth over the coming decade, the atrocious performance of these generators means reliability of supply remains a serious concern.

The report recommends that the Victoria Government ask the Australian Energy Market Operator (AEMO) to develop an appropriate reliability standard and strategic reserve and that the Government prepares the administrative arrangements to implement this.  

Commenting on the main finding of the report, co-author Associate Professor Bruce Mountain said: “The reliability challenges are substantial and existing institutions will not deliver reliable supply. Ideally all states and the Commonwealth will now work together to ensure AEMO is put in the box seat and its proposals on ensuring reliability are implemented. But there is no need to wait on consensus: nothing is lost if Victoria takes the lead and works with AEMO directly to make this happen.”