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Read our full Annual Report here

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Change

AEMO is the independent grid and market operator, with primary responsibility of managing and maintaining power system security for all Australians. We are committed to leading the way in securing and shaping Australia’s energy future.

2017 Annual Report

Yesterday vs Today

The Australian energy landscape is shifting
towards renewable power

Megawatts of coal, gas, hydro and other resources in the NEM from 2008–2017

The rise of the renewable generation

Wind

2008–17 INCREASE

43 small wind
units

2016–20 PROJECTION

4035MW large wind
units

Solar

2008–17 INCREASE

0.1m small solar
PV units

2016–20 PROJECTION

233MW large scale
solar
Chairman

Chairman’s
Message

I am proud of what AEMO has achieved in my time as a Director and Chair, and confident that our AEMO team will continue to engage openly on the challenges and deliver exemplary operations, advice and support in the best interests of energy consumers nationally.

chairmans icon

During 2016-17, AEMO responded to the broad implications of the transformation of the energy sector.

2016-17 was filled with challenges for AEMO and for Australia’s energy sector more generally. The year brought an unprecedented level of interest and scrutiny of our operations.

We welcome this and continue to engage in the public energy debate as an opportunity to work more closely with all our stakeholders. Our goal remains to improve the level of shared understanding of the challenges and opportunities offered by our industry’s transformation so we can deliver solutions that benefit Australia’s businesses and households

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CEO

CEO’s
Message

Australia is well-positioned to lead the charge in the global transition to greater renewable energy penetration, given our quality resources, experience and technical knowhow.

CEOs icon

Customer choice in how they source and use energy will only increase, as data and communications keep growing and developing.

Since I arrived in March 2017, I’ve been asked how I’m finding Australia. I’ve also been informed on more than one occasion that I’ve arrived at an interesting time for the energy sector.

My response to this has not changed in the eight months I’ve been here – I am loving Australia and notwithstanding the challenges, I cannot imagine a better place to lead the discussion on transitioning the energy industry towards a secure, reliable, affordable and low emission future.

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Our Business

AEMO is the independent grid and market operator, with primary responsibility of managing and maintaining energy system security for all Australians.

Security & Reliability

Electricity

Electricity1

1 December 2016, South Australia separation

On 1 December at 01:16 AEDT, the South Australian power system separated from Victoria, resulting in localised outages in the state for up to an hour, together with the disconnection of the Portland smelter in Victoria.

Electricity 2

28 September 2016, System Black

On 28 September 2016, a storm passed through the state of South Australia with tornadoes causing major damage to the transmission system. This resulted in five faults in very quick succession on the transmission grid in the northern part of the state.

Electricity 3

8-10 February 2017 heatwave

On Wednesday 8 February at 19:03 AEDT, 100 megawatts of local load shedding was instructed in South Australia, to maintain the security of the power system over the state’s evening peak demand.

Electricity 4

June 2016, ESCOSA licensing arrangements

In June 2016, ESCOSA commenced a review of the regulatory, licensing, and associated arrangements for connection of new electricity generators in SA. AEMO’s technical advice to ESCOSA was built on the results of a number of current and recent AEMO investigations, including AEMO’s Future Power System Security program and analysis into the 28 September 2016 state-wide blackout in SA.

Gas

Government intervention and response

The convergence of the gas and electricity sectors has never been more prominent as illustrated in our advice to government and industry, which resulted in the implementation of the Federal Government’s Domestic Gas Security Mechanism. It was pleasing to note that a coordinated effort between government and industry based on AEMO’s independent information highlighting the risk of potential shortfalls, resulted in guaranteed gas supply for the east coast gas market for 2018.

1 October 2016, Longford gas production facility trip

A six hour unplanned total outage of the Longford Gas Plant occurred on 1 October 2016 following the loss of electricity supply within the plant. AEMO intervened in the Victorian Declared Wholesale Gas Market and issued a Notice of Threat to System Security and an ‘ad hoc’ schedule at 09:00 that day.

Increased pipeline capacity for underground gas storage refilling

AEMO’s 2017 Victorian Gas Planning Report identified the inability to refill the Iona underground gas storage facility in Port Campbell prior to winter 2018 as a Threat to System Security. This is the first time that AEMO has identified a threat to system security in a gas planning review.

Victorian Northern Interconnect (VNI) Expansion Project

The VNI Expansion Project was developed to increase the gas transportation capacity from Victoria to New South Wales. The project involved constructing a new 260 km, 400 mm, higher pressure pipeline in parallel to the existing smaller pipeline.

Forecasting & Planning

Looking ahead, AEMO’s Forecasting and Planning team will be focussing on providing data analysis and insights that will help steer the National Energy Strategy’s broad strategic direction.

AUG 2016

The annual Electricity Statement Of Opportunities (ESOO) continued to provide technical and market data to the decision-making processes of market participants, new investors, and jurisdictional bodies as they assessed opportunities in the NEM over a 10-year period.

DEC 2016

The 2016 National Transmission Network Development Plan (NTNDP) illustrated the need for transmission networks to evolve to maintain a reliable, secure power system for the future.

DEC 2016

AEMO’s third National Gas Forecasting Report (NGFR) emphasised uncertainties and highlighted challenges facing policy-makers, infrastructure planners and asset operators over the next 20 years.

DEC 2016

The West Australia Gas Statement of Opportunities (WA GSOO) is AEMO’s independent assessment of the WA domestic gas market for the outlook period 2017 to 2026.

MAR 2017

The annual Gas Statement of Opportunities (GSOO) report emphasised the increasing interdependencies between gas and electricity and supply and demand, calling for a holistic “single energy view”of the Australian energy industry.

JUN 2017

The inaugural Energy Supply Outlook highlighted requirements for a secure power system over the next two years under extreme summer conditions.

JUN 2017

The 2017 Electricity Forecasting Insights (EFI) report, continues to independently forecast electricity consumption and demand over the five NEM regions over a 20-year outlook period.

JUN 2017

The Wholesale Electricity Market (WEM) Electricity Statement of Opportunities (ESOO) report found the uptake of rooftop solar continues to impact operational and peak demand, accelerating a paradigm shift for the energy industry.

Markets

AEMO continues to work with government stakeholders and regulators to implement new market mechanisms and frameworks that deliver efficiencies and benefit to consumers.

Electricity

Power of Choice gets underway

Work on AEMO’s Power of Choice (PoC) program progressed steadily throughout the 2016-17 financial year. The PoC Implementation Program follows completion of a number of Australian Energy Market Commission (AEMC) rule changes between late-2015 and mid-2016 aimed at enhancing consumer choice.

Collaborating with ARENA

In May 2017, AEMO and ARENA signed a memorandum of understanding (MOU) to facilitate collaboration around the organisations’ areas of mutual interest relating to ensuring electricity system security and reliability.

Gas

Gas Bulletin Board

AEMO has made several enhancements to the Gas Bulletin Board in response to rule changes and market reviews.

Following recommendations made in the AEMC’s East Coast Wholesale Gas Market and Pipeline Frameworks Review, AEMO implemented a new market prices page and adopted a fixed and consistent standard for the assumed direction of bidirectional pipelines.

Gas Supply Hub

On 28 March 2017, AEMO implemented the Wallumbilla single product for the gas supply hub following a recommendation made by the COAG Energy Council in 2015. The Wallumbilla single product was delivered through the Optional Hub Services framework.

People & Culture

AEMO, supported by its People and Culture team, continues to develop a highly capable, agile and engaged workforce that supports AEMO’s vision to deliver energy security to all Australians.

Graduate program

AEMO expanded its graduate skillset to include electrical engineers with a focus on Power Systems, econometricians, scientists, mathematicians and statisticians.

applications

1,000

Applications for 9 positions in our 2017 Graduate program

tick

TOP100

in Australian Financial Review’s top 100 Graduate programs in Australia

Healthy Communities

Healthy community programs focus on sustainability and corporate social responsibility and provides AEMO and employees avenues to make a positive impact on the world we live in.

24%

reduction in
energy use per person

30%

increase in
volunteering totalling 411 hours

AEMO will continue to work closely with the COAG Energy Council, the newly established Energy Security Board and our Expert Panel, together with our stakeholder groups, to develop and deliver solutions that will enable efficient, reliable and secure energy now, and for future generations of Australians.

There is no better time to be in the energy industry or at AEMO and I look forward to a successful year ahead.

Audrey Zibelman