Update on Australian NetZero efforts

by Chris Morris

People have queried what is happening in Australia with their push for a decarbonised all renewables/ Net Zero grid since the last update in 2023. The answer is not much progress but massive amounts of money spent.

Renewable power has gone up to 9% of energy consumption, but energy productivity and intensity trends are flattening out. Power prices have risen above the rate of inflation and there is near terminal de-industrialisation. Despite massive LNG exports, there is a gas shortage, including for power stations.  Biomass still provided more energy than wind and only a little less than solar. Most energy production is exported – the coal and gas shipments that people don’t want to be reminded of as that pays for the virtue signalling.  The promised nirvana of cheap plentiful carbon-free power is probably further away now than it was then. Reality is just so cruel to the idealistic dreamers.  Probably best summed up by a quote from Nick Cater “Sadly, our climate and energy policy remains in the grip of an intelligentsia that lacks the wisdom to recognise the boundaries of its own ignorance”.

The long outage at Broken Hill showed wind, solar and batteries couldn’t work when they were islanded.  AEMO recognised in their Dec 2025 Transition Report about the difficulty of doing a system restart using only renewables. They write “exploring restoration support services to address stable load unavailability, and two new Type 2 Transitional Services trials to demonstrate black start capability using inverter-based resources (IBR) and to enable system restart in a high distributed photovoltaic (PV) environment.” They are still testing basic functions, like restarting without traditions resources, so it hasn’t been proven as viable, let alone something that can be relied upon.

There is a very good definition by AEMO that encompasses what system security means:

“A secure power system is one operated safely within defined technical limits, with the ability to withstand credible disturbances, return to secure operation, and restart following a widespread outage. While reliability requires sufficient generation and network capacity to meet customer demand, the requirements for system security are more technical, and include system strength (the ability of a power system to maintain and control the voltage waveform at any location, both during normal operation and following a disturbance), frequency and inertia, voltage control, transient and oscillatory stability, operability, and system restoration.”

If synchronous generators are to be replaced by IBRs, the latter have to be proven to reliably meet all those requirements in adverse conditions.  Even the ever-optimistic AEMO doesn’t think that is the case.

In their earlier power system risk review report, they were concerned that all the renewables would cause protection issues, more non-credible events (2 or more loss of generation/ transmission events together or cascading) and batteries changing power flows in the transmission system. Their answer seems to be just more studies, reviews and consultations.  They saw the emerging risks from synchronous generation shutting down with resultant low system strength as a possibly very serious issue, potentially leading to cascading events like the one which blacked out Spain. The terminology now used for unstable frequency is “small signal stability” As they write  “Small signal stability is the ability of the power system to maintain synchronism after being subjected to a small perturbation without the application of a contingency event. This issue is gaining an increased focus in the NEM due to the growing presence of IBRs. “ That was another system strength problem that Spain highlighted with sub/ super synchronous oscillations leading to the cascade.

Armwaving statements by academics and advocates about what they theoretically do doesn’t cut it in the real world of grid operations. Performance and reliability have to be shown to be there before acceptance. That is why new plants have strict grid acceptance tests of their setting and protection systems before they are allowed to connect. They then need regular tests to show they stay compliant. And when issues arrive like relays tripping when they shouldn’t (the initiator of the Iberian blackout), the setpoints need to be changed and proven to work at the new settings.

There is a tacit acknowledgement that wind is too unreliable to provide a backup to solar. Even for an area the size of Australia, the wind isn’t always blowing somewhere. Figure 1 shows the variability. Figure 2 shows the continued reliance on coal for electricity

Fig 1   The total Eastern grid (NEM) wind generation over 24 day period showing both its variability and rapid changes (from Jo Nova). The black line shows total grid load and green is the wind generation.

The promised new pumped storage and transmission lines to support the renewables are bogged down by delays. Snowy 2.0 looks like it will be near a decade late and an order of magnitude more expensive with less storage capacity that originally promised. About the scheme, Robert Onfray in late 2023 substack post wrote “ In January this year, the project made headlines again after it was announced there would be a one-year delay. Then, in May, another announcement pushed the estimated completion out another two years. In five months, the official completion date has been delayed by three years, from 2026 to 2029. When first announced by Turnbull, Snowy 2.0 was going to be built by 2022. The construction cost estimate has blown out ten-fold to $20 billion, plus $10 billion for the plant and another $9 billion for 1,000 kilometres of 500kV transmission line connections to Sydney and Melbourne”. The energy company that is building it is currently preparing the latest price and commissioning estimate. Despite their promises, it won’t be the final  one.

About the engineering aspects of the scheme, he wrote “Snowy 2.0, on the other hand, will be a giant, expensive, inefficient battery that will consume water and electricity to produce very little electricity, in contrast to the original Snowy Mountains Hydro Scheme’s excellent reputation and engineering excellence. ….It is no secret in engineering circles that the Snowy 2.0 tunnels are far too long for an efficient pumped hydro system. Leading geologists and engineers know that the geological conditions for tunnelling in a typical tectonically induced alpine geology with opposing faults, tight folds, shears, bedding plane shears, and abutting perched waters are challenging and expensive. They knew this from geotechnical reports from the original Snowy scheme. And they were right, as the project costs have blown out way behind original estimates. It is simply remarkable that this project went ahead at all. It was doomed because of geology alone, let alone the defective concept.” No doubt it went ahead because the incompetent people advising the incompetent Prime Minister of the time thought he needed a good soundbite of a “vision” as his legacy. He will be remembered for it, but not in the way he dreamt.

The giant pumped storage in Queensland was cancelled by a new government that baulked at the cost. – even more expensive than Snowy 2 The smaller one at Borumba still hasn’t been committed to by the state but has Federal approval (and money) for exploratory works.  The timeline for that is ridiculously ambitious and even if it goes ahead, it will be late and invariably overbudget. – they still haven’t confirmed the geology yet. The new transmission lines to bring in power to the cities, replacing the coal fired stations, from yet to be built solar and wind are overbudget and held up with planning delays. For some reason the city elites can’t understand, farmers don’t want all the pylons and power lines crossing their land with all the use restrictions with it. The woke are very big on Aboriginal land  acknowledgements but not so for farmers who have been there generations. As the link mentions, these transmission lines will also need Federal concessional finance, aka subsidies.

The proposed extra DC link to Tasmania has also been hit by cost blowouts. The state no longer has an abundant hydro supply (they had to restart a mothballed fossil fuel plant as they had run out of water through reckless energy trading), and often has to import brown coal power from Victoria.

NSW is paying for a power company to extend the life of a big coal powered power station again, possibly to 2030s. The closure of Liddell cost them dearly and they are now near constantly having to import power. They also need more gas to reduce the summer blackout risk. The average age of the remaining coal stations across Australia is about 40 years old. People seem to want them only to generate when it is needed but things aren’t like that. They cannot just stop and start, can’t even rapidly ramp up or down and they have a relatively high minimum stable generation limit that constrains their turndown.  They are not well maintained because of budget cuts starving them of capital investment, having to run at a loss at least part of the time, uncertainty of operation and politicians regularly trumpeting imminent closure to meet the Net Zero goals.

Fig 2: the year’s grid fuel source of the electricity generation showing coal is still the backbone of supply. The bars show the percentage from each source for the year while the graph under it is the weekly generation from each source. The dip at the end is the Xmas holidays. By showing wind as a weekly figure, it minimises its variability(note uncredited graphs are from the AEMO website)

Because of the regular middle of the day negative pricing caused by a surplus of solar and wind, some States are looking at “free” electricity to consumers over this period. The details of how this will be done has yet to be worked through, but it will invariably cost either consumers or taxpayers. You don’t get owt for nowt.

Another problem the grid is having to deal with is the loss of visibility for all the domestic solar – the behind the meter generation. When this generation drops, like for say a cloud going over, it only shows as an unexpected increase in demand. These increases can be big. Figure 3 shows a 500MW increase. This would have to be covered by FCAS (Frequency Control Ancillary Services ).   Note that there are now 10 products in the FCAS market, a number of which had to be introduced because of unreliability and lack of inertia for wind/ solar.

To try to deal with the excessive domestic generation and subsequent negative pricing in the middle of the day, the federal government came up with a multi-billion dollar scheme to subsidise domestic battery installation.  The scheme was badly designed and in something that should have been obvious to everyone except the scheme designers, rich homeowners installed the biggest batteries they could. These were a lot larger than their solar panels can deliver. The scheme costs got out of control. The government has redesigned the scheme and put in more money. The actual effect of all these household batteries on the grid has not been determined. It is fair to say that it is unlikely to be what was intended. It is hard to believe that all that uncontrollable and largely invisible load/ generation will make grid operations and management any easier.

Fig 3 The upper graph of grid demand showing a significant unexplained jump while the lower one was generation from grid connected solar farms. The mass of lines was the models prediction of the load, with the marked ones the actual load. This event was probably from something like a front arriving and domestic solar dropping output. (graphs from Wattclarity)

When events like this happen, it is no wonder that the grid frequency has increasing instability (Figure 4). The swings regularly go outside the deadband. That must cause significant changes in currents flowing along the lines, with the transformers having to adjust the tapchangers to keep the voltages under control. Even with frequency control on automated dispatch in the batteries providing FCAS, it would be difficult for the operators to see what is happening, let alone take remedial action.

Fig 4  The grid frequency over a 5 hour period middle of the day showing the instability – small signal stability conditions. It is often outside the deadband where no corrective action is needed, and stays within the permissible bounds but there would be significant call on FCAS. (Wattclarity is a very good site for providing reports on Australian grid events and things of interest.)

Though the batteries are touted as energy storage, they mainly seem to be used as reserve generation for grid management. In 2025, near half the revenue of the South Australian ones came from FCAS during outages and the accompanying price spikes. If they are there to provide that, their general energy trading operation providing power after the sun goes down is much restricted.

The AEMO in their December 2025 transition plan admit “Grid-forming battery energy storage systems (BESS) are progressing rapidly to be able to deliver a wide range of system security services in the NEM such as frequency control, voltage stability and some aspects of system strength.” Note they aren’t there yet and even then, they won’t provide the full suite of system strength abilities. All of which fossil fuel plant supplies as free extras to go with their generation. For the organisation tasked with implementing the government’s plans, that is quite an admission. Or are they just preparing the groundwork to say “I told you so” when the next blackout happens?

They then write “AEMO’s 2025 system strength and inertia assessments have confirmed the importance of delivering system strength and inertia solutions in tandem.” This is why Planning Engineer has been regularly writing that system strength is an undervalued capability. The lack of it is one of the main reasons the Iberian Peninsula blackout occurred.

The current federal government in Australia came to power in 2022 with a promise that their renewables push would lower power prices to the consumer. By mid 2023 the energy regulator was warning of power price increases. Since being in power, prices to consumers have gone up by hundreds of dollars.   Undaunted by their failure, the same government hasn’t backed away with the promises still being made – just a longer timescale is needed.

The “average” spot price on the wholesale market bears no resemblance to what is paid by consumers because of all the negative pricing. It also isn’t volume weighted. But it is still touted by the know-nothings as proof of the cheapness of renewables. Data is hard to come by but it appears many stations (especially solar ones) are constrained off a significant proportion of the time from a combination of negative pricing together with system and line constraints. That will affect their commercial viability (a case for more subsidies?).

Australia has stopped building wind farms. It took until December for the first wind farm that year to get to financial close.so construction could start. Even then, this station was just for the separate South Western Grid in Western Australia. There were several in South Australia that were close to go-ahead but the ink isn’t on the contracts yet. Their economics (who will buy their power) aren’t known either.

AEMO, the grid operator, has warned of blackouts if the remaining coal plants are shut down. This was because the replacement equipment to provide system security wasn’t being built. That warning could be why the governments are now quietly pushing for the plants closure to be postponed, going for underwriting their continued operation. Originally this was just to 2027 for a large station in NSW, but now they want longer and no doubt more plant will be included.

South Australia (SA)

There are still the puff piece articles with headlines like this – South Australia may be first big grid in world to go without synchronous generation . The article is wrong. South Australia is not a grid. It is a small part of the larger Eastern Australian (NEM) grid. There is a massive AC interconnector coming into the state from the south and smaller DC ones from the East.  The current flows along these interconnectors (at times 20-30% of grid load) mean that South Australia can virtue signal about its renewables target with minimised risk of blackout when the wind/ solar can’t deliver. The brown coal stations in Victoria supply power when wind and solar can’t. SA is also subject to massive electricity price variability on the spot market. And one trading period, or even one day is not what to base your electricity supply on. It needs to be over a ten year period at N-1-G (enough generation to cope with both the biggest transmission line and biggest single generator out of service at peak load)  before it can be regarded as even near secure.

Boxing Day 2025 gives a very good illustration of how the raw grid data can be spun by articles like the Renew Energy one. The AEMO graphs showing the State’s supply, demand and price shows an apparent load of just 99MWnett for the state (Figure 5). However, the grid operators have a much higher Minimum System Load (MSL) they have to conform to to give stability.  It was why 243MW was being generated – a third on gas– the difference had to be exported on the interconnectors (Figure 6). Without them, the State would have been in significant strife trying to cope with excess generation. This low nett generation is because of all the behind the meter household solar generation.

Fig5      Boxing Day 2025 showing minimal SA grid load (99MW), and power flowing into and out of the state on the interconnectors – why it isn’t a self-contained grid. The DC in is at its operating limit and the AC out near its limit. However, despite negative pricing, the gas turbines are generating as they are constrained on (which consumers have to pay for) to provide system strength services.

Fig 6     The fuel supply for the Minimum System load shown in previous figure showing the gas turbines running for grid stability. Note no grid solar.

A lot of grid solar and wind will be shut down as nowhere for the power to go. Incidently, that regular curtailment is causing commercial viability issues. The promoters’ pollyannaish answer to this seems to be new transmission lines and more batteries will solve the problem. As New Zealanders say sarcastically, “Yeah, right”

The minimum nett dropped to just 19MW for one period on Xmas Day 2025 (Fig 7) with rest of 180MW exported. However, one of the big grid batteries was issued a directive on Xmas Day to stay synchronised and absorb load to give extra grid support.

Fig 7     The SA  grid generation source on Xmas Day 2025 showing the wind and solar were dispatched off to keep gas on. The actual generation mix at the marked line is shown in the bar chart below.

This very low grid generation is not truly representative for the State though. Looking at the data over a 12 month period shows a significantly different picture. That (Fig 8) shows that gas is still producing a quarter of the electricity. For one week in winter, it was about half, with diesel engines providing more power than batteries. Grid solar provided very little as that is always being constrained off by the domestic solar.

Fig 8     Electricity generation in SA over a year showing a quarter comes from gas. Highlighted is a week where most was supplied by gas and diesel produced as much as batteries. As previously mentioned, the aggregating of the wind to weekly figures masks its variability.

It gets even worse that that if one dives deeper into the detail. On one day (Figure 9), 83% of the generation came from gas and a further 5% from diesel. The much vaulted batteries provided less than that. It is days like this that the grid operators have to plan for. If they listened to the wind/ solar advocates with no fossil fuels allowed; as well as power being very expensive, there would be near total blackouts. But the fossil fuel generation needing to be available has to be paid for, even if it rarely generates. So it costs more to have a duplicated system.

Fig 9     Generation in South Australia 27th Jun 2025 showing overwhelming reliance on gas and diesel for the peaks with very little wind or solar available that day. There would have also been significant power imported from Victoria through the interconnectors.

Even that bad news for the advocates is not the full picture. Like the Boxing Day data shows, they are often exporting electricity at giveaway prices. No generation company could survive the loss making, unless there are big subsidies. But at night in the winter months as well as burning diesel to run engines, the state will be importing expensive coal powered energy from Victoria or possibly even Queensland. That is why they need the interconnectors.

Of course there is a price to pay for the solar, wind and batteries. The state has the most expensive electricity in Australia for the consumer – about US30c a unit. That power price is part of the reason the state has deindustrialised more than others have.

There is so much rooftop solar that the SA government has introduced solar curtailment plans so their supply can be shut off if it is too high. They are also lowering feed in tariffs. This is to try to reduce the risk of excessive voltages on the distribution network, which will damage appliances. In serious cases, the grid operators can automatically trip inverters. As part of this, the power network has introduced a scheme where you can send up to 1.5kW into the grid near unrestricted except for when excessive voltage trips your system. The alternative they want adopted is allowing up to 10kW in, but the network has more control over that supply. It remains to be seen if this solves the problem.

SA subsidises consumers and small businesses. This is in addition to the federal government subsidising renewable generation and paying the fossil fuel plants not to shut down as well as generating to provide system strength services.

Summing Up

There has been little decarbonisation since 2020. Aging, increasingly unreliable coal fired power stations are still the backbone of the electricity supply. The price of energy is inexorably rising.  Australian governments, both State or Federal, are subsidising domestic solar and batteries, subsidising grid wind and solar generation, subsidising fossil fuel plant to stay generating to do what the unreliable wind and solar can’t, and subsidising consumers as power is too expensive. When will it all end in tears?