Victoria’s lowest-ever electricity demand of 1,564 megawatts (MW) at 1:00 PM was recorded on December 31, 2023. This was due to a significant supply of electricity from solar panels installed in households and workplaces. Solar power constituted 66% of the energy consumed in Victoria at this point. This trend of reduced demand is ongoing, declining by around 400 MW annually. As this goes on, there are new plans required to maintain the stability of the electricity system.

What Happens When Demand Decreases?

The reduced demand for electricity presents problems for how the power system operates. The Australian Energy Market Operator (AEMO) must ensure that critical services, including maintaining the correct voltage and frequency, continue to function. To achieve this, they have established limits on the minimum amount of power that has to be utilized to maintain the system in a proper state. This is usually around 640 MW, but when some power lines go out of service, this figure can rise up to 1,610 MW.

One critical component of this system is the Basslink interconnector, which assists in sending power between Tasmania and Victoria. If Basslink is down, or if there are other issues in the system, it becomes more difficult to control power flow, so it is more likely that emergency measures will be required to keep everything operating safely.

Preparing for Emergencies

If the demand continues declining, Victoria will require contingency plans in order to maintain stability in the system. According to experts, by spring 2025, Victoria may require almost 1,000 MW of additional support to ensure the power grid remains secure. This is a tremendous spike from 71 MW required in 2023. This implies that fresh solutions need to be implemented urgently.

How Can the System Remain Balanced?

To address these issues, Victorian power companies have some options. One is to cut the volume of electricity generated by smaller power sources that are not part of the main power grid. Another is to change when individuals utilize hot water heating, pushing it to mid-day when there is additional solar power.

There are also new regulations that mandate rooftop solar systems to have special controls that enable them to cut the amount of energy they export to the grid when necessary. A last resort is modifying voltage levels to prevent solar systems from feeding too much power into the grid. But this approach is only employed in emergency situations since it can cause issues with customers’ electrical devices.

How Much Backup Capacity is There?

Victoria should have around 577 MW of backup capacity available by October 2025 under standard circumstances. It could be higher at 908 MW if even more people take up the new solar power guidelines. But it is difficult to ensure that individuals comply with such new guidelines, and in other locations, adherence has been challenging to achieve.

AEMO estimates that approximately 740 MW of new rooftop solar installations will be added between October 2024 and October 2025 under the new backup power regulations. Whether or not Victoria achieves its power safety targets hinges on how efficiently the new systems are implemented and adhered to.

What Could Go Wrong?

Despite these plans, there are also dangers. In rare situations, power companies may need to shut down some sections of the grid in order to maintain demand levels at a sufficient level. This would involve shutting down some customers, which is undesirable. Furthermore, it may be hard to get people to comply with the new solar power regulations, and power companies will have to struggle to ensure compliance.

What Needs to Be Done Next?

AEMO is collaborating with Victoria’s power corporations to prepare for low-demand conditions anticipated between October and December 2024 and onwards. The strategy involves ensuring new rules for backup power are in effect and that systems are prepared to rapidly adjust power consumption when necessary. Power corporations are also making efforts to enhance their capacity to respond to emergencies in a timely manner—preferably within ten minutes.

Another key step is enhancing how big power plants and networks interact to deal with low-demand periods. There are also plans for investing in improved voltage control and other technologies that will enable them to manage these changes better.