Aus energy grid needs urgent upgrades

A wind farm in Tasmania.
Tasmanian wind, solar and hydro energy will travel to the mainland via the undersea Marinus Link. -PR Handout Image

Australia must urgently invest in the electricity transmission grid to ensure the lights stay on during the nation's transition to renewable power, the federal government says.

While the transition won't happen overnight or without challenges, the government will address the issue head-on, Energy Minister Chris Bowen said on Thursday.

The Australian Energy Market Operator's new 30-year plan for the National Electricity Market acknowledges the need for new investment has "gathered momentum" in recent weeks as the eastern states grappled with power supply issues.

"If the past few weeks have taught us anything, it's that when it comes to our national energy market we need to plan ahead and we need certainty," Mr Bowen said in a statement.

"We'll continue to work day and night to not only keep the lights on but get the firmed renewables we need in the grid to put downward pressure on prices."

There will be moments when there is enough renewable energy to meet 100 per cent of demand, AEMO's 2022 Integrated System Plan shows.

But the NEM must still be able to constantly supply affordable and reliable electricity to homes and businesses.

"It cannot offer quick fixes, but it does offer a clear and transparent roadmap through to 2030, and then to 2040 and 2050," AEMO CEO Daniel Westerman said of the plan on Thursday.

More than 10,000km of new transmission is needed, as communities and industry move beyond an electricity grid that leans on a handful of coal-fired power plants.

State and territory governments are backing new energy investment while the federal government has adopted a "rewire the nation" policy, which should support a "timely" rollout, Mr Westerman said. 

Industry groups have welcomed the regulator's roadmap, saying the transition is essential.

"The adoption and transition to renewables will bring immense opportunity to Australians in terms of creating jobs, lowering emissions and ensuring security to our power supply," Climate Council senior researcher Tim Baxter said.

Annual electricity consumption from the power grid is expected to double by 2050 - as transport, heating, cooking and industry go electric - while 60 per cent of current coal generation is tipped to exit by 2030.

A nine-fold increase in grid-scale wind and solar farm capacity - triple the firming capacity from storage, hydro and gas plants - and a near five-fold increase in rooftop solar on homes and businesses will be needed to maintain a secure, reliable and affordable electricity supply.

Gas-fired generation will also play a crucial role as coal-fired generation retires, the regulator said.

Gas will complement battery and pumped hydro generation in periods of peak demand, and help cover for planned maintenance of existing generation and transmission.

Mr Westerman also tagged five energy projects for urgent construction in Victoria, NSW and Tasmania, including the Victoria to NSW Interconnector West between the Snowy Mountains region and Melbourne.

Cabinet Minister Tony Burke said the urgency of the situation was a direct consequence of inaction by the former coalition government.

"The previous government had deliberately not acted to provide what would give Australians not just cleaner energy, but also cheaper and more reliable energy," he told ABC radio on Thursday.