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Firming Technologies to Reach 100% Renewable Energy Production in Australia’s National Electricity Market (NEM)

Australia has committed to reducing its greenhouse gas emissions in a manner consistent with limiting anthropogenic climate change to no more than 2 degrees Celsius. One of the ways in which this commitment is being realised is through a shift towards variable renewable energy (VRE) within Australia’s National Electricity Market (NEM). Substituting existing dispatchable thermal plant with VRE requires consideration of long-term energy resource adequacy given the unpredictability of solar and wind resources. While pumped hydro and battery storage are key technologies for addressing short-term mismatches between resource availability and demand, they may be unable to cost effectively address ‘energy droughts’. In this article, we present a time sequential solver model of the NEM and an optimal firming technology plant mix to allow the system to be supplied by 100% VRE. Our conclusion is that some form of fuel-based technology (most likely hydrogen) will probably be required. This has important implications for Australian energy policy.

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Keywords: Energy storage, Electricity markets, Energy market modelling

DOI: 10.5547/01956574.44.6.jgil

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Published in Volume 44, Number 6 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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