Australia's Energy Ministers are seeking feedback on the design of a new national Orderly Exit Management (OEM) Framework, to support energy reliability as ageing coal-fired power stations leave the system.
Eraring power station is a black coal-fired power station on the shores of Lake Macquarie, southeast of Newcastle, NSW. Its four steam turbines give it a generating capacity of 2640 megawatts, making it the equal largest power station in Australia in terms of generating capacity. Eraring substation on the left.
The NSW Government has been leading the detailed design of the OEM Framework, which will act as a back-up for the energy transition, with support from energy market bodies and other National Electricity Market jurisdictions.
The Orderly Exit Management (OEM) Framework is designed to ensure consumers have access to stable, reliable and affordable energy as the Commonwealth and state governments accelerate the transition to renewables. The Framework will only apply in jurisdictions where the relevant state government voluntarily opts in.
NSW and the Commonwealth are accelerating investment in renewable energy to replace the capacity of ageing and increasingly unreliable coal power stations.
The OEM provides all state governments with an added mechanism to manage the risk of early closures on energy reliability and affordability.
If applied, the Framework provides a clear process for governments to manage situations where owners of a coal-fired power station seek to bring forward its retirement date. The Framework involves an assessment of the impacts of the retirement on the reliability and security of the electricity system and, if an adverse impact is identified, consideration of alternative measures to bridge the gap.
If required, it also enables a government to temporarily extend the operation of the power station while new renewable infrastructure comes online, through a voluntary agreement or a direction. Following this, the power station will be permanently closed.
The Energy and Climate Change Ministerial Council is seeking feedback on the proposed OEM Framework via a consultation paper. Feedback will help inform the final design of the OEM Framework, including detailed legislative and commercial instruments that are necessary to implement the Framework.
This consultation period will be open until Friday 2 February 2024.
Those wishing to have their say can visit Orderly Exit Management Framework Consultation Paper – December 2023
Quote attributable to the NSW Climate Change and Energy Minister Penny Sharpe:
"The Orderly Exit Management Framework is about how we can guarantee reliability at the lowest possible cost while we transition our energy system to renewables.
"The NSW Government is committed to getting as much renewable energy into our grid as quickly as possible to meet our emissions reduction targets and provide a reliable supply of clean, affordable electricity for NSW homes and businesses.
"We don't want coal-fired power stations open a minute longer than needed. This framework provides a back-up for the energy transition, to be used only as a last resort where we don't have enough time to feasibly get new renewables or storage into the system."
