Verdict
Yes. Our modernising power system needs smart, flexible generation, rather than large inflexible power stations that create ‘baseload’ power.
Analysis
A reliable electricity supply is all about balancing the real-time demand and supply. And in today’s modernising electricity system, the most valuable attribute for power stations is flexible operation. Major changes have taken place in Australia’s electricity systems over the past decade, with over 4 million homes1 – or over a third of all households – now hosting their own mini power stations, in the form of rooftop solar PV. This phenomenon means that the National Electricity Market and the South West Integrated System in Western Australia are frequently experiencing low demand for electricity during the daylight hours when solar generation is strong, with relatively short windows of peak power demand at either end of the day. This trend, together with the growing role of large-scale solar and wind in Australia’s energy system, means that our modernising power system needs to be flexible so that it can adjust to significant troughs and peaks in demand.
Traditional ‘baseload generation’ – a term referring to large power stations designed to run continuously around the clock – tends to have limited flexibility and struggle to operate efficiently in this more dynamic energy market. Newer forms of baseload generation, including modern nuclear power stations, also have limited flexibility to ramp up or down in response to the changing market environment2. For this reason, baseload generators are likely to be more of a hindrance than help as the generation mix changes3. It is cheaper to meet the bulk of customer needs for energy by harnessing the low-cost electricity created by wind and solar, paired with energy storage technologies that can ‘dispatch’ this lower-cost power on demand.
System reliability – that is, sufficient generation, connected by poles and wires, to meet demand at any given time, can be maintained without baseload power. Researchers from the University of New South Wales tested this and found that a mix of renewable energy technologies consisting of 50-60% wind, 15-20% solar, 15-20% solar thermal storage with the remainder hydro or gas generates a supply of electricity with the same reliability as coal-fired baseload power4. The Australian Energy Market Operator has found that reliability is likely to remain strong over the next 10 years, as long as investment in renewable energy is maintained. Its 2024 Electricity Statement of
Opportunities (ESOO) – a technical and market data analysis over a 10-year period – highlights that delivery on time of expected investments in generation, storage and transmission will be able to maintain reliability over most of the next 10 years, although AEMO also find that additional generation, transmission and storage development will be needed over the timeframe. Any delays in renewables, or unplanned withdrawal of existing coal generation, would deteriorate the outlook for reliability.5
References
1 – Department of Climate Change, Energy, the Environment and Water. (2024). Australia hits rooftop solar milestone. URL: https://www.energy.gov.au/news-media/news/australia-hits-rooftop-solar-milestone
2 – Nuclear Energy Agency. (2021). Advanced Nuclear Reactor Systems and Future Energy Market Needs. Chapter 4, page 55. URL: https://www.oecd-nea.org/upload/docs/application/pdf/2021-12/nea_7566_arfem.pdf
3 – International Renewable Energy Agency. (2015). From Baseload to Peak: Renewables provide a reliable solution. URL: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2015/IRENA_Baseload_to_Peak_2015.pdf
4 – Diesendorf. M. (2013). Baseload power is a myth: even intermittent renewables will work. URL: Baseload power is a myth: even intermittent renewables will work
5 – Australian Energy Market Operator. (2024). 2024 Electricity Statement of Opportunities. URL: 2024-electricity-statement-of-opportunities.pdf
