Solar farms forced to switch off as poles and wire delays hamper renewable transition
The Australian government has set a target of 82 per cent renewable energy by 2030 — from 35 per cent in 2023 — and a 43 per cent reduction in carbon emissions.
The Australian Energy Market Operator (AEMO) has previously laid out a $122 billion blueprint, known as the Integrated System Plan (ISP), for the country's electricity grid to achieve that goal without major disruption as ageing coal-fired generators are taken offline.
NSW's Eraring coal plant will cease operations in 2027, followed by Victoria Yallourn coal plant in 2028.
But AEMO has warned that delays and cost blowouts for a number of major transmission projects, particularly in Victoria, will severely curtail the amount of energy generated by renewable energy projects over the next two years.
'While some locations have not seen heavy congestion historically, they are nearing their current network limits and additional capacity may result in new areas of congestion,' AEMO's 2025 Enhanced Locational Information report published on Wednesday said.
Major transmission projects facing delays include the $3.3 billion VNI West, a 500 kV double circuit transmission line connecting the NSW and Victorian energy grids, the 700 kilometre EnergyConnect line between South Australia and NSW, and the 190 kilometre Western Renewables Link from western Victoria to Melbourne.
AEMO's analysis found no major solar farms in Victoria or South Australia were forecast to have a shut-off rate of less than 35 per cent by 2027, with that figure as high as 65 per cent for some projects.
'This is more pronounced in the near-term horizon, while improvements are seen in the medium term based on new actionable ISP projects being delivered, and as investment is made to meet required system security services which would begin to relax system security constraints,' the report said.
'Projected curtailment is particularly high in South Australia and Victoria in the near term, as these regions are further progressed in the renewable transition, and each further increase in capacity is more heavily curtailed by minimum security and export limitations.'
AEMO noted that there were approximately 20 gigawatts (GW) of projects currently at the application to connect stage, as well as the 300 GW of proposed future projects under consideration by developers using a range of technical and economic considerations to identify the most viable project locations.
'Opportunities exist in all National Electricity Market (NEM) regions for renewable and firming projects to deliver energy, capacity, and network support services,' AEMO executive general manager of system design Merryn York said in a statement.
'This report presents key locational data to help investors understand where their projects are most likely to succeed, and where challenges, such as network congestion, curtailment, or energy losses, may arise. Not all locations are equal, and geographic network conditions must be a critical part of investment decisions.'
AEMO's report warned some locations were already reaching 'significant levels' of congestion and curtailment.
In 2024, over half of all grid-scale wind and solar generation experienced network-driven curtailment of less than 1 per cent. Wind farms averaged 1.1 per cent network curtailment, but this was as high as 4.8 per cent for some units.
However for solar farms, curtailment averaged 4.5 per cent with several experiencing 'very high levels' of curtailment above 25 per cent.
'High curtailment was mainly concentrated in specific areas (particularly western New South Wales and north west Victoria), and illustrates that most transmission lines did not experience significant congestion,' AEMO said.
'The most severe network congestion arose in areas with high levels of generation connected in locations that were originally designed to service demand rather than supply. These high network congestion areas broadly overlap with the areas experiencing high levels of generation curtailment.'
The Clean Energy Council, which represents a number of solar investors impacted by the forecast curtailment, told The Australian Financial Review the slow rollout of transmission was affecting investment decisions.
'As the coal fleet exits, we need new capacity in the right places and quickly,' CEC spokesman Chris O'Keefe told the newspaper.
'Large-scale solar is fast and cost-effective to build, but it's also the most exposed to curtailment, especially when system security limits or negative prices hit in the middle of a sunny day.
'In the longer term, the only durable solution is new transmission. These transmission projects are absolutely essential to unlocking new generation and maintaining momentum in the transition.'
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