AEMO Energy Update June 2016

JUNE 2016

FLAT FORECASTS FOR CONSUMPTION FROM THE GRID P3 2017–18 RESERVE CAPACITY TARGET REFLECTS WESTERN AUSTRALIA’S CHANGING ELECTRICITY CONSUMPTION PATTERNS P7 THE PEOPLE BEHIND AEMO P11 Energy Update June 2016

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UPDATE FROM MANAGING DIRECTOR AND CEO MATT ZEMA It’s been a busy period for AEMO over the past couple of months, with the release of a number of new reports, the launch of the new Moomba Gas Supply Hub, and the preparation in the lead up to the transfer of roles of System Management from Western Power to AEMO from 1 July 2016.

Starting tomorrow, I am delighted to welcome the System Management function to AEMO. This is a crucial next step in our integration with Western Australia operations, and I have been very impressed with the knowledge, systems, processes and willingness to assist from our new team members.

We welcome the broader visibility and opportunities that come from working as a national organisation.

This transition is part of the Western Australian Energy Market Review, which is an opportunity for AEMO to play a leading role in setting up WA’s energy sector for future success. Following the transition of System Management, AEMO is planning to implement initial changes to the Reserve Capacity Mechanism by July 2016, with final changes implemented

by July 2018. I am excited that AEMO will be taking accountability for retail market operations in July 2018. This is a great opportunity to develop and implement Wholesale Electricity Market improvements, including constrained market dispatch by July 2018, all in the best interests of WA consumers.

Looking at the sector nationally, from a retail perspective AEMO is focussing on designing and implementing major electricity reform via the Power of Choice program. By December 2017, there will be a new business-to-business electricity framework, and by December 2017 we will implement reform relating to metering competition and embedded networks.

Looking back at the findings of our reports, in June we published our National Electricity Forecasting Report (NEFR). For the first time, the NEFR explored trends in household electricity usage, and finds that, while households today use more lighting, have larger televisions, more web-connected devices, larger capacity whitegoods, and have more heating and cooling capacity, the growth in these services has not resulted in more electricity being consumed from the grid.

You can find out why on page 3.

Also published mid-June was the Wholesale Electricity Market Electricity Statement of Opportunities (WEM ESOO), which reports that although consumers may have increasing numbers of electrical appliances at their disposal, energy delivered from the SWIS is expected to grow very slowly over the next ten years.

Based on this study, 4,552 megawatts (MW) of generation capacity is required in the SWIS over the next two years. Get the full story on page 7.

In early June we released our 2016 Victorian Annual Planning Report (VAPR), which identified that North West Victoria is experiencing a high level of interest for new renewable energy generation, however connecting even some of the proposed 1,500 MW of generation will exceed the network capability of the local transmission network. You can learn more about this analysis on page 6.

Also of significance was the launch of the newly established Moomba Gas Supply Hub and two additional trading locations at the Moomba to Adelaide pipeline and the Moomba to Sydney pipeline, which are now open for trading. This development means that market participants will have increased accessibility to trade between the southern markets and the liquefied natural gas Queensland market, opening up greater market access to new participants, and smaller producers, large users and retailers in South Australia and New South Wales.

Over the coming months we plan to release a number of reports and initiatives. This includes the release the National Electricity Market (NEM) Electricity Statement of Opportunities, which will report on the adequacy of existing and committed generation and transmission capacity in the NEM to meet maximum demand and annual operational consumption forecasts over the next 10 years. We will also be releasing a NEFR insights paper, which will look at the impact of electric vehicles on the grid. Also of note will be the latest report from our Future Power System Security program, which seeks to identify opportunities and challenges to power system security and stability that could arise in the long-term. We are also running a number of roadshows on this piece of work, which will take stakeholders through how AEMO manages the power system, what the future means for the industry and consumers, issues, short-term fixes and potential long-term solutions. And, finally, we will be launching our new and improved website to better meet your needs, something I am personally very excited about.

CONTENTS P2

Update from Managing Director and Chief Executive Officer Matt Zema

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Flat forecasts for consumption from the grid

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New generation in North West Victoria will require investment

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2017–18 Reserve Capacity Target reflects Western Australia’s changing electricity consumption patterns

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Energy Update June 2016

P10 New Moomba Gas Supply Hub launched P10 Coming Soon - AEMO’s Redeveloped Website P11 The people behind AEMO P12 In brief

F L AT F O R E C A S T S F O R CONSUMPTION FROM THE GRID For the first time, AEMO has explored trends in household electricity usage as part of its 2016 National Electricity Forecasting Report (NEFR), which also provides operational consumption and maximum and minimum demand forecasts for each National Electricity Market (NEM) region over a 20-year outlook period to 2035–36.

AEMO Managing Director and Chief Executive Officer Matt Zema said that while households today use more lighting, have larger televisions, more web-connected devices, larger capacity whitegoods, and more heating and cooling capacity, the growth in these services has not resulted in more electricity being consumed from the grid.

Matt said that these new and improved appliances are replacing energy intensive appliances such as halogen lights, plasma televisions, desktop computers and stereos. Despite an expected population growthof 30 per cent, operational consumption across the NEM is forecast to remain flat over the 20-year outlook period.

“Operational consumption declined from 2009–10 to 2013–14 and has since increased moderately with the commencement of liquefied natural gas (LNG) exports from Queensland. Aggregate NEM operational consumption of electricity from the grid has fallen from 195,000 gigawatt hours (GWh) in 2009–10 to a forecast 183,000 GWh in 2015–16[1], a decline of six per cent,” said Matt.

Matt said that these flat forecasts are not because consumers are reducing the use of electric appliances, but rather a result of advancing energy technology and more consumers producing their own electricity from rooftop solar photovoltaic (PV), offsetting demand for electricity supplied from the grid.

“Projected energy efficiency savings by the year 2035–36 are expected to total around 27,000 GWh,” said Mr Zema. “This translates to an equivalent of close to 15 per cent of current grid-supplied electricity use.”

While rooftop solar PV installation is forecast to slow after 2030, electricity generated from rooftop solar PV is expected to increase from 5,600 GWh today to 25,000 GWh by 2035–36.

“This is close to four times today’s levels or an increase of almost 350 per cent, equivalent to 11 per cent of current electricity consumption from the grid. This is despite the fact that by 2035–36, the average solar panel age will then be 13 years old and running at a reduced generation efficiency.”

Matt said the 2016 NEFR shows that the transformation underway within the energy sector has some way to go yet and will continue to change the demand profiles in the NEM beyond the outlook horizon.

“Maximum demand is forecast to remain flat across the outlook period, despite increased use and capacity of heating and air conditioning as growth is offset by energy efficiency and rooftop PV. In particular rooftop PV is changing power flows so the maximum electricity demand of the system is projected to occur later in the day when the sunshine is less intense,” added Matt.

“However minimum demand for electricity is forecast to remain flat for five years and then reduce rapidly with forecast increases in rooftop PV, starting to shift minimum demand from overnight to near midday when the sun is strongest and overhead. This is already the case for South Australia.”

Matt said that operational consumption is becoming increasingly separate from usage trends, as clearly evidenced in business sector forecasts.

“While electricity is still important for business growth, this growth appears to be increasingly decoupled from electricity consumption. This trend can be most clearly seen in some of Australia’s industries, such as the services sector incorporating education and health care, and food and beverage manufacturing, which are expected to grow, despite using relatively less energy than traditional energy-intensive industries such as the automotive manufacturing industry, which is exiting the market,” said Matt.

Matt said AEMO’s challenge is to anticipate and plan for how the market will respond to these changing demand profiles and energy usage trends and how it might impact power system security and reliability.

“AEMO is working closely with the local and international energy community to monitor, analyse and report on changing demand profiles and energy usage trends in the NEM and how this compares globally,” said Mr Zema. “We are also consulting with industry to explore possible impacts on the security and reliability of the grid as a result of these changes, and what actions if any, may need to be taken to maintain power system security.”

[1] 2015–16 consumption is estimated on a weather-normalised basis, assuming long-run median climate outcomes.

Maximum demand is forecast to remain flat across the outlook period, despite increased use and capacity of heating and air conditioning as growth is offset by energy efficiency and rooftop PV,” AEMO Managing Director and Chief Executive Officer Matt Zema.

Energy Update June 2016

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2016 National Electricity Fore

The 2016 National Electricity Report (NEFR) provides independent electricity consumption and maximum and minimu forecasts for each region in the National Electricity Market (NEM) over a 20-year outlook period from 2015–16 to 2035 The effects of energy technology advancements and changing consumer behaviour on energy usage and demand for grid-supplied electricity become clearer as we move through the electricity supply chain.

GENERATION Percent of installed capacity in the NEM as at April 2016.

Biomass

0.8% Coal

TRANSMISSION

DISTRIBUTION

KEY INSIGHTS

Liquefied natural gas (LNG)

Flat

~95.6% Electricity consumption for LNG production is forecast to increase 95.6% over the 20-year forecast period, from 4,334 gigawatt hours (GWh) to 8,478 GWh.

Rooftop PV capacity is forecast to more than triple over the 20-year forecast period from ~4.4 GW to ~20.1 GW.

47.7%

Total NEM-wide consumption

forecast period (from 183,258 GWh - an increase of 0.03%), 30% growth in population an growth in the Australian econ

ELECTRICITY CO

Gas-fired generation

Residential

(Combined-cycle gas turbine; and Open-cycle gas turbine)

By 2035–36, 3.8 gigawatts (GW) of rooftop PV capacity (19% of total PV capacity) is expected to have integrated battery storage, providing 6.6 GWh of energy storage potential.

Assuming stored battery energy is discharged over a number of hours, battery storage is forecast to reduce peak demand by 1.5% by the end of the 20-year forecast period.

16.6% Gas – other

~4.1%

RETAIL

~8.3%

Consumption from the grid fr forecast to decrease ~16% ov from ~51,074 GWh to ~42,89

Hydro

15% Other

0.3% Rooftop photovoltaic

ENERGY EFFICIE Queensland’s export LNG industry is projected to increase the state’s electricity consumption by 8.3% or 4,144 GWh from 2015–16 levels.

and to occur overnight in the short term.

By the mid-2020s, rooftop PV capacity is forecast to grow to the point of shifting the time of minimum demand from the grid to midday. By the end of the 20-year horizon, minimum demand is expected to reduce between 3%–10% per annum depending on the region, as rooftop PV capacity keeps growing.

(PV)

Measuring the use and impro capacity and/or function) of e Australian households use mo more web-connected devices more heating and cooling cap when electricity consumption

8.2% Solar

(Large-scale)

0.3% Wind

6.9% Current data sourced from AEMO’s Generation Information Page as at April 2016.

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Energy Update June 2016

HOUSEHOLD EL

Maximum demand is forecast to remain and increasing rooftop PV capacity.

electricity appliance usage, o functionality characteristics, f

ecasting Report

um demand 5–36. r

n of electricity from

8 GWh to 184,467 despite a forecast nd projected average nomy.

Australian households are using more electric appliances than ever, and this is forecast to continue growing.

appliances is forecast to offset increasing use consumption of electricity from the grid.

The outlook for grid-supplied electricity is further is forecast to increase by 350% from current levels by 2035–36, equivalent to 11% of current grid-supplied electricity use.

ONSUMPTION FORECASTS BY SECTOR Manufacturing

~16%

rom the residential sector is ver the 20-year forecast period 96 GWh.

Other business sectors*

~6.4% Consumption from the grid from the manufacturing sector is forecast to increase 6.4% over the 20-year forecast period from ~50,684 GWh to ~53,944 GWh.

~10.9% Consumption from the grid from other business sectors (including coal) is forecast to increase ~10.9% over the 20-year forecast period from ~85,911 GWh to ~95,313 GWh. *This includes industrial and commercial users, including coal mining, LNG, the services sector, and food and beverage manufacturing.

ENCY FORECASTS Over the 20-year outlook, annual improvements in energy plus increasing installations of rooftop PV each year (0.51% of total NEM operational consumption), are offsetting the effect of population growth on electricity consumption.

~27,082 GWh by the end of the 20-year forecast period reducing forecast total electricity consumption by 14.8%.

LECTRIC APPLIANCE USAGE TRENDS

oved characteristics (such as size, electric appliances shows that ore lighting, have larger televisions, s, larger capacity white goods and pacity than in 2009, n from the grid was at its peak.

ownership and quality, and from 2009 until 2035–36.

~183.6%

Network (web) access services

~102.6%

~46.7%

Lighting

~126.4%

Televisions

~59.1%

Heating

~42.5%

Set top boxes

~80.9%

Cooling

Pool pumps

Energy Update June 2016

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N E W G E N E R AT I O N IN NORTH WEST V I C TO R I A W I L L REQUIRE INVESTMENT North West Victoria is experiencing a high level of interest for new renewable energy generation, however connecting even some of the proposed 1500 MW of generation will exceed the network capability of the local transmission.

In its Victorian Annual Planning Report (VAPR) released on Thursday 9 June 2016, AEMO identified the key driver for potential network augmentation is shifting away from the need to manage peak demand, and is instead focused on enabling higher levels of concentrated generation in areas of low network capability.

AEMO Managing Director and Chief Executive Officer Matt Zema said that increased certainty around the Largescale Renewable Energy Target (LRET) has accelerated interest in new generation connections in Victoria, specifically in the North West region of Victoria due to favourable conditions for wind and solar generation.

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Energy Update June 2016

“Minor transmission line upgrades and local control schemes could support the connection of up to 200 MW of additional generation in the area, however major augmentations may be required for further proposed generation to ease the risk of congestion.

“In an environment where the energy industry is transforming to include higher levels of renewable generation, major network augmentations to increase capacity might in fact be cost effective for consumers, as development would enable renewable generation to be connected to the grid and efficiently transported to demand centres.

“AEMO has begun scoping a Regulatory Investment Test for Transmission (RIT-T) for augmentation in North West Victoria to determine if the market benefits of augmentation are viable. Rigorous consultation with a range of stakeholders will be crucial to better understand the opportunities and possibilities to deliver a safe, secure and efficient network for the future,” said Matt.

With demand growth slowing, AEMO is working closely with distribution and transmission network businesses across the state to implement supply switching control schemes to defer the need for non-urgent network augmentation.

“AEMO’s mission is to maintain energy security for all Australians at the lowest cost to consumers, so wherever possible, AEMO recommends the design and implementation of low-cost control schemes to increase transmission network capacity without materially affecting the security and reliability of the grid,” said Matt.

Acknowledging potential investment in augmentation may be required, the replacement of ageing assets continues to be the primary driver for transmission investment in Victoria, comprising approximately three quarters of transmission spend in the state over the coming three years.

About the VAPR

The VAPR considers the adequacy of the Victorian transmission network to meet its reliability requirements, and identifies development opportunities to address emerging network constraints. The report can be found here.

2017–18 RES ERVE CAPACI TY TAR GET REF L E CT S WES T ERN AUS TRALI A’S C H A N GIN G ELECTRI CI T Y CONS U MP T ION PATTERNS

AEMO has released its Deferred 2015 Electricity Statement of Opportunities for the 2017–18 Capacity Year, which is used to determine the amount of electricity capacity required in Western Australia’s South West interconnected system (SWIS) by 2018 to ensure the electricity network can meet forecast peak demand.[1] The report also presents longerterm electricity peak and operational consumption forecasts for the SWIS over a 10-year forecast period from 2016–17 to 2025–26, and provides information on generation and demand side management capacity operating in the SWIS, as well as planned capacity, capacity requirements and network development opportunities.

AEMO Managing Director and Chief Executive Officer Mr Zema explained that although consumers may have increasing numbers of electrical appliances at their disposal, energy delivered from the SWIS is expected to grow very slowly over the next ten years.

“Based on these forecasts, we’ve determined the Reserve Capacity Target (RCT), that is the amount of generation capacity required in the SWIS to efficiently meet forecast demand over the next two years, to be 4,552 megawatts (MW),” said Matt.

“Given the current level of installed and committed capacity in the SWIS, no new generation or demand side management capacity will be required over the forecast period. However, the WA Government’s Electricity Market Review currently underway could affect the excess capacity level in the WEM.”

Matt said the forecasts show consumer take-up of improved energy management technology, more energy efficient devices, and distributed generation options such as rooftop solar photovoltaic (PV), is changing the way households and businesses consume energy, impacting traditional consumption patterns and peak demand profiles in the SWIS. “The report shows that forecast growth in rooftop solar PV, energy efficiency, battery storage and in-home energy monitoring devices is expected to result in slow electricity consumption growth from the SWIS from around 18,452 gigawatt hours (GWh) in 2015–16 to around 20,249 GWh by the end of the 10-year outlook,” said Matt.

“We’re already seeing the effects of these new technologies today with rooftop solar PV systems installed by one in five residential customers, and more energy efficient new appliances replacing older models,” added Mr Zema. “Consumer uptake of energy management systems including battery storage technology is expected to continue this trend and not only reduce demand from the network, but also shift peak demand to later in the day.”

Matt pointed out that annual peak demand in the SWIS is one area already impacted by changing consumer behaviour and emerging technologies.

“Annual peak demand in the SWIS has historically occurred on a late afternoon in February. However, three of the last five annual peaks have occurred later in the day and earlier in the year, between early January and early February,” said Mr Zema. “This trend is primarily driven by the rapid take-up of rooftop solar PV, customers monitoring and lessening their consumption to reduce their exposure to capacity cost payments, and changing weather and temperature conditions.”

The increasingly unpredictable nature of peak demand presents challenges for forecasting, noted Matt.

“This shifting peak makes it harder to accurately determine the RCT and increases the risk of procuring too

much or too little capacity for the SWIS, ultimately impacting the price consumers pay for electricity.”

Matt said that growth in rooftop PV has allowed residential and commercial customers to generate some of their electricity needs on site, reducing the requirement for electricity delivered from the network during peak demand times.

“Rooftop PV is estimated to have reduced peak demand on 8 February 2016 by around 96 MW, or 2.3%, from 4,109 MW to 4,013 MW. AEMO estimates that rooftop PV also shifted peak demand by an hour, from the 16:30 to 17:30 trading interval,” said Matt.

“The continued growth of rooftop PV installations has affected both the level and timing of peak demand over the last five years. And we expect rooftop PV capacity in the SWIS to continue to grow off the back of technological, commercial and regulatory factors such as government incentives, falling installation costs, electricity tariffs, and changes in consumer attitudes and behaviours.”

[1] Publication of the 2015 ESOO was postponed from June 2015, following direction from the Minister for Energy to defer aspects of the 2015 Reserve Capacity Cycle (which relates to the procurement of capacity for the 2017–18 Capacity Year), in light of the Electricity Market Review.

Further information on the Electricity Market Review is available at: http://www.finance.wa.gov. au/cms/Public_Utilities_Office/Electricity_Market_ Review/Electricity_Market_Review.aspx.

FAST FACTS: SOUTH WEST INTERCONNECTED SYSTEM (SWIS) ELECTRICITY NETWORK – Incorporates over 7,800 kilometres of transmission lines from Kalbarri to Albany, and Perth to Kalgoorlie.

– Supplies 18 terawatt hours of electricity a year to over 1 million customers.

Energy Update June 2016

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A glimpse of the futur Forecasting Western Australia’s electricity consumption trends over the next ten years to 2025–26 Australia’s energy industry is undergoing an unprecedented transformation. Consumers are benefiting from technological advancements in energy efficiency and energy storage systems, changing the way Australians are consuming electricity from the grid.

This infographic explores the key themes of the Deferred 2015 Wholesale Electricity Market Electricity Statement of Opportunities (WEM ESOO), primarily electricity peak demand and the operational consumption outlook for the South West interconnected system (SWIS) in Western Australia (WA) over a 10-year forecast period, from 2016–17 to 2025–26.

What is the WEM ESOO? The WEM ESOO contains peak demand and operational consumption forecasts across a range of weather and economic scenarios over a 10-year forecast period from 2016–17 to 2025–26.

In particular, the report highlights the 10% probability of exceedance peak demand forecast to determine the Reserve Capacity Target (RCT) for the 2017–18 Capacity Year.

The WEM ESOO also provides information on: • Generation and Demand Side Management capacity in the SWIS. • Planned capacity, capacity retirements, and development opportunities.

RCT = 4,552

megawatts (MW)

The Reserve Capacity Target for the 2017–18 Capacity Year

Western Australia

+7 % APPROX.

Residential consumption (excluding rooftop PV) in WA’s SWIS is forecast to increase from ~5,144 gigawatt hours (GWh) to ~5,518 GWh over the 10-year forecast period.

+10% APPROX.

Commercial** consumption in WA’s SWIS is forecast to increase from ~13,414 GWh to ~14,731 GWh over the 10-year forecast period.

+13% APPROX.

Peak demand in WA’s SWIS is forecast to increase from ~4,073 megawatts (MW) to ~4,606 MW over the 10-year forecast period.

What will Western Australia’s electricity consumption look like in 10 years’ time?

+ 9%

South Australia

APPROX.

Consumption from the SWIS is forecast to grow ~9% over the 10-year forecast period.

Increasing uptake of new technology is forecast to flatten the peak demand and shift it later into the day.

- 17.5%

$ Annual peak demand is becoming harder to predict.

Reforms to the WEM following the WA State Government’s Electricity Market Review aim to reduce electricity production and supply costs and facilitate the long-term stability of the SWIS.

At present, roughly one in five (22.5%) residential customers in the SWIS has rooftop photovoltaic (PV) installed, making WA the third highest state for dwellings with rooftop PV (as a proportion of total dwellings).† †

Due to differences in methodologies, rooftop PV is excluded from sales in Western Australia.

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Energy Update June 2016

- 0.5

APPROX.

APPROX.

Residential consumption in South Australia is forecast to decrease from ~3,836 GWh to ~3,165 GWh over the 10-year forecast period.

Business* co in South Aus forecast to d from ~8,858 G ~8,815 GWh 10-year forec

re

5%% 5

onsumption stralia is onsumption decrease stralia is GWh to decrease over the GWh to cast period. over the cast period.

About AEMo This infographic has been developed by the independent Australian Energy Market Operator (AEMO), using information from the Deferred 2015 Wholesale Electricity Market Electricity Statement of Opportunities and the 2016 National Electricity Forecasting Report.

AEMO plans, develops, and operates markets that are responsive to energy sector needs and support investment for the long-term benefit of Australian consumers. © 2016. The material in this publication may be used in accordance with the copyright permissions on AEMO’s website.

Queensland Queensland

- 5.5%% +12%% - 5.5 +12

APPROX.

APPROX.

Residential consumption in Residential Queensland is consumption in forecast to decrease Queensland is from ~12,831 GWh forecast to decrease to ~12,121 GWh over from ~12,831 GWh the 10-year forecast to ~12,121 GWh over period. the 10-year forecast period.

APPROX.

+11%% +11 APPROX.

Business* consumption in Business* Queensland is consumption in forecast to increase Queensland is from ~38,531 GWh forecast to increase to ~43,169 GWh from ~38,531 GWh over the 10-year to ~43,169 GWh forecast period. over the 10-year forecast period.

APPROX.

Peak APPROX.demand in Queensland is Peak demand forecast to increase in Queensland is from ~9.3 GW to forecast to increase ~10.3 GW over the from ~9.3 GW to 10-year forecast ~10.3 GW over the period.

10-year forecast period.

New South Wales New South Wales

- 4.1%% +3.5%% 0%% - 4.1 + 3.5 0

- 23%% - 23

Peak APPROX. demand in South Australia is forecast to decrease from Peak demand in South Australia ~3.2 gigawatts (GW) to ~2.6 GW is forecast to decrease from over the 10-year forecast period. ~3.2 gigawatts (GW) to ~2.6 GW over the 10-year forecast period.

- 1.1%% - 1.1

Tasmania Tasmania

- 10.3%% - 10.3

Residential consumption APPROX. in Tasmania is forecast to Residential consumption decrease from ~2,022 GWh in Tasmania is forecast to to ~1,813 GWh over the decrease from ~2,022 GWh 10-year forecast period. to ~1,813 GWh over the 10-year forecast period.

APPROX.

Residential APPROX. consumption in Residential New South Wales is consumption in forecast to decrease New South Wales is from ~19,667 GWh forecast to decrease to ~18,853 GWh over from ~19,667 GWh the 10-year forecast to ~18,853 GWh over period. the 10-year forecast period.

Business* APPROX. consumption in Business* New South Wales is consumption in forecast to increase New South Wales is from ~49,252 GWh forecast to increase to ~50,979 GWh from ~49,252 GWh over the 10-year to ~50,979 GWh forecast period. over the 10-year forecast period.

PeakNOdemand in CHANGE New South Wales Peak demand in is forecast to New South Wales remain flat over is forecast to the 10-year forecast over period, at around the 10-year forecast ~14.1 GW. period, at around ~14.1 GW.

Victoria Victoria

APPROX.

APPROX.

nO chAnge

APPROX.

APPROX.

Residential consumption APPROX. in Victoria is forecast to Residential consumption decrease from ~12,718 GWh in Victoria is forecast to to ~12,576 GWh over the decrease from ~12,718 GWh 10-year forecast period. to ~12,576 GWh over the 10-year forecast period.

+1.6%% + 1.6 APPROX.

Business* consumption APPROX. in Tasmania is forecast to Business* consumption increase from ~8,513 GWh in Tasmania is forecast to to ~8,645 GWh over the increase from ~8,513 GWh 10-year forecast period. to ~8,645 GWh over the 10-year forecast period.

+4.6%% + 4.6

- 4%% -4

APPROX.

APPROX.

Business* consumption APPROX. in Victoria is forecast to Business* consumption increase from ~31,442 GWh in Victoria is forecast to to ~32,876 GWh over the increase from ~31,442 GWh 10-year forecast period. to ~32,876 GWh over the 10-year forecast period.

Peak APPROX. demand in Victoria is forecast to decrease from Peak demand in Victoria is ~9.9 GW to ~9.6 GW over forecast to decrease from the 10-year forecast period. ~9.9 GW to ~9.6 GW over the 10-year forecast period.

0%% 0

nO chAnge

Peak NO demand in Tasmania, CHANGE currently the only winter Peak demand in Tasmania, peaking state in the country, currently the only winter is forecast to remain flat peaking state in the country, over the 10-year forecast period, at around ~1.8 GW. over the 10-year forecast period, at around ~1.8 GW.

* Business as defined in AEMO’s NEFR includes all electricity consumersas other than in residential. * Business defined AEMO’s NEFR includes all electricity ** Commercial as defined in AEMO’s WEM ESOO includes consumers other than residential. all electricity consumers than residential. ** Commercial as definedother in AEMO’s WEM ESOO includes all electricity consumers other than residential.

Energy Update June 2016

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NEW MOOMBA GA S S U P P LY H U B OPEN FOR TRADING On Wednesday 1 June 2016, AEMO announced the launch of the newly established Moomba Gas Supply Hub and two additional trading locations at the Moomba to Adelaide pipeline and the Moomba to Sydney pipeline.

The Moomba Gas Supply Hub follows the successful introduction of the Wallumbilla Gas Supply Hub (GSH), established in 2014 to enhance the transparency and reliability of gas supply by creating a voluntary market that offers a low-cost, flexible method to buy and sell gas at interconnecting transmission pipelines.

The GSH is an exchange for the wholesale trading of natural gas. It allows participants to place anonymous offers or bids on a specified quantity of gas, at a specified price, which can then be automatically matched on the exchange to form transactions.

According to AEMO, “the establishment of the Moomba Gas Supply Hub stemmed from the request of a number of large users in New South Wales and South Australia to consider the feasibility of this trading location.

“Following a detailed feasibility study and close consultation with the industry and governments, we are pleased to announce the Moomba Gas Supply Hub is open for trading”.

The Moomba trading location uses the same trading platform, settlement systems, and is subject to the same regulatory framework as the three Wallumbilla trading locations.

“Participants will have increased accessibility to trade between the southern markets and the liquefied natural gas Queensland market, opening up greater market access to new participants, and smaller producers, large users and retailers in South Australia and New South Wales”.

AEMO held regular meetings with industry throughout this process and would like to commend all those involved.

COMING SOON – AEMO’S REDEVELOPED WEBSITE AEMO is redeveloping its website to better meet the needs of you, our stakeholders. The site has been designed with the user front of mind, and will be simple, intuitive, and will provide transparent, easy-to-access information.

Some of the key improvements to the site include improved navigation, upgraded search functionality, data visualisations, and being fully mobile responsive.

The redeveloped site is due for launch at the end of July 2016.

If you have any questions, please contact Joe Adamo, GM Communications and Corporate Affairs at AEMO.

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Energy Update June 2016

THE PEOPLE BEHIND AEMO… INTRODUCING JESSIE YEUNG, G A S O P E R AT I O N S A N A LY S T In this column we take you behind the scenes at AEMO, introducing you to some of our employees. In this edition we talk to Jessie Yeung, Gas Operations Analyst, who joined AEMO as part of our 2014 Graduate Development Program, and who has since gone on to join our business in a permanent role.

Energy Update (EU): Thank you for sharing your story with us, Jessie. Can you tell us a bit about your background?

Jessie Yeung (JY): I graduated from Melbourne University in 2013 with a Bachelor of Engineering (Chemical).

During my time there I did an internship at a consulting firm in Hong Kong for two months. After that experience, I decided consulting was not for me. In my final year I was searching for a suitable grad program and that’s when I came across AEMO. I wanted to do something that genuinely made a difference and AEMO provided that opportunity.

EU: What was it about AEMO’s Graduate Development Program (GDP) that attracted you?

JY: I was interested in the energy industry because it is always relevant, and I knew it would provide exciting challenges and opportunities. A big deciding factor for me was that AEMO was offering a three year program with four rotations whereas the other programs I was looking at were a lot shorter (or longer) but with less rotations. It was important for me to get exposure to other parts of the business.

EU: Can you explain what you and your team do, and why it is such an important function at AEMO? JY: After I finished the GDP I was offered a full time position as an analyst in Operations. I focus mainly on the gas markets – making sure that all our gas market systems and operations are running correctly. We also run emergency exercises that are gas specific which can be quite hands on. Our teams’ purpose is mainly ensuring that we don’t run the East Coast of Australia out of gas.

EU: How do you feel the graduate program prepared you for your role?

JY: The GDP instilled a lot of confidence in my own abilities as well as a sense of pride and accountability. I was given a lot of responsibility in producing documents for the team and a lot of hands on experience. Transitioning from the GDP into a full time position was like removing the training wheels from your bike – I was given more responsibility but I was ready for it. The program also allowed me to get involved with other projects and volunteer myself as much as possible which gave me direction and helped me gain a greater understanding of AEMO and the work that I do.

EU: And finally, what do you like most about working at AEMO? JY: The fact that the work I do has the potential to have a broad and positive impact, and that we’re not just working for the sake of it, it is really rewarding.

Also, AEMO is filled with passionate, dedicated, and intelligent people who are great to work with – I believe we all share the same objective of working in the best interests of energy consumers and that really motivates me. It makes it exciting to come to work every day when you are working with people who are like-minded and motivated, yet able to challenge your perspective and make you think about problems or a situation in a new or different way.

Energy Update June 2016

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IN BRIEF A E M O ’ S 2017 GRAD U AT E D E VEL OP MENT PROGRAM— APPLICATIONS NOW OPEN AEMO is pleased to launch the search for our next group of graduates, with applications for our 2017 Graduate Development Program (GDP) opening on 9 June.

Graduates at AEMO contribute to Australia’s energy future in an environment that challenges and empowers its people to be their best. Our graduates benefit from a three-year program which offers real projects, with real responsibilities and exposure to mentoring from some of the top energy experts in the industry.

Our graduates rotate across our business and are provided with a structured development program supported by a mentor, manager, and a buddy.

Our graduates go on to have successful careers as power system engineers, gas operations engineers, analysts, statistical modellers, forecasters, and economists.

With sites in Victoria, New South Wales, Queensland, South Australia, and Western Australia, AEMO offers its graduates an attractive remuneration and benefits package, including study assistance, health and well being programs, and an active social club.

Do you want to be empowered at AEMO? Do you know someone who might be interested? Learn more about our 2017 Graduate Development Program. Applications close on 7 July 2016.

AEMO TRAINING Course

Location

Date

Network and FCAS Constraints in the NEM

Sydney

13-14 July 2016

Wholesale Electricity Market Introduction

Perth

13 July 2016

Energy Markets: STEM, Balancing and LFAS

Perth

20 July 2016

Reserve Capacity Mechanism

Perth

20 July 2016

Wholesale Electricity Market Introduction

Perth

10 August 2016

Overview of the National Electricity Market (NEM)

Melbourne

11 August 2016

Energy Markets: STEM, Balancing and LFAS

Perth

17 August 2016

Reserve Capacity Mechanism

Perth

17 August 2016

For more details on all courses, and on how to register, visit AEMO’s Learning Centre or call the Information and Support Hub on 1300 236 600.

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Energy Update June 2016