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Firming Technologies to Reach 100% Renewable Energy Production in Australia’s National Electricity Market (NEM)

Author

Listed:
  • Joel Gilmore
  • Tim Nelson
  • Tahlia Nolan

Abstract

Australia has committed to reducing its greenhouse gas emissions in a manner consistent with limiting anthropogenic climate change to no more than 2 degrees Celsius. One of the ways in which this commitment is being realised is through a shift towards variable renewable energy (VRE) within Australia’s National Electricity Market (NEM). Substituting existing dispatchable thermal plant with VRE requires consideration of long-term energy resource adequacy given the unpredictability of solar and wind resources. While pumped hydro and battery storage are key technologies for addressing short-term mismatches between resource availability and demand, they may be unable to cost effectively address ‘energy droughts’. In this article, we present a time sequential solver model of the NEM and an optimal firming technology plant mix to allow the system to be supplied by 100% VRE. Our conclusion is that some form of fuel-based technology (most likely hydrogen) will probably be required. This has important implications for Australian energy policy.

Suggested Citation

  • Joel Gilmore & Tim Nelson & Tahlia Nolan, 2023. "Firming Technologies to Reach 100% Renewable Energy Production in Australia’s National Electricity Market (NEM)," The Energy Journal, , vol. 44(6), pages 189-210, November.
    • Handle: RePEc:sae:enejou:v:44:y:2023:i:6:p:189-210
    DOI: 10.5547/01956574.44.6.jgil
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    References listed on IDEAS

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    1. Child, Michael & Kemfert, Claudia & Bogdanov, Dmitrii & Breyer, Christian, 2019. "Flexible electricity generation, grid exchange and storage for the transition to a 100% renewable energy system in Europe," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 139, pages 80-101.
    2. McConnell, Dylan & Forcey, Tim & Sandiford, Mike, 2015. "Estimating the value of electricity storage in an energy-only wholesale market," Applied Energy, Elsevier, vol. 159(C), pages 422-432.
    3. Sadiqa, Ayesha & Gulagi, Ashish & Breyer, Christian, 2018. "Energy transition roadmap towards 100% renewable energy and role of storage technologies for Pakistan by 2050," Energy, Elsevier, vol. 147(C), pages 518-533.
    4. Lu, Bin & Blakers, Andrew & Stocks, Matthew & Do, Thang Nam, 2021. "Low-cost, low-emission 100% renewable electricity in Southeast Asia supported by pumped hydro storage," Energy, Elsevier, vol. 236(C).
    5. Tracey Dodd & Tim Nelson, 2019. "Trials and tribulations of market responses to climate change: Insight through the transformation of the Australian electricity market," Australian Journal of Management, Australian School of Business, vol. 44(4), pages 614-631, November.
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    Citations

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    Cited by:

    1. Khezr, Peyman & Menezes, Flávio, 2025. "Investment incentives in a wholesale electricity market with storage," Energy Economics, Elsevier, vol. 146(C).
    2. Nolan, Tahlia, 2024. "Is pivoting offshore the right policy for achieving decarbonisation in the state of Victoria, Australia's electricity sector?," Energy Policy, Elsevier, vol. 190(C).
    3. Gilmore, Joel & Nelson, Tim & Nolan, Tahlia, 2025. "Quantifying the risk of renewable energy droughts in Australia's National Electricity Market (NEM) using MERRA-2 weather data," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 912-928.
    4. Simshauser, Paul & Gilmore, Joel, 2026. "On the electrification of gas loads in Australia's national electricity market," Energy Policy, Elsevier, vol. 208(C).
    5. Simshauser, Paul & Gohdes, Nicholas, 2025. "Incomplete markets, pumped hydro storage and the role of policy in Australia's national electricity market," Energy Policy, Elsevier, vol. 204(C).
    6. Gohdes, Nicholas, 2025. "On spot revenues, capital structure and trade off theory: Analysing investment risk for contracted renewables," Energy Economics, Elsevier, vol. 148(C).
    7. Rangarajan, Arvind & Svec, Jiri & Foley, Sean & Trück, Stefan, 2025. "Revisiting the crisis: An empirical analysis of the NEM suspension," Energy Economics, Elsevier, vol. 141(C).
    8. Aldaadi, Mohsen & Pantoš, Miloš & Riaz, Shariq & Chapman, Archie C. & Verbič, Gregor, 2025. "A novel production cost model for provision of capacity firming by prosumer batteries," Energy, Elsevier, vol. 321(C).
    9. Newbery, David M. & Biggar, Darryl R., 2024. "Marginal curtailment of wind and solar PV: Transmission constraints, pricing and access regimes for efficient investment," Energy Policy, Elsevier, vol. 191(C).
    10. Gorman, Nicholas & MacGill, Iain & Bruce, Anna, 2024. "Re-dispatch simplification analysis: Confirmation holism and assessing the impact of simplifications on energy system model performance," Applied Energy, Elsevier, vol. 365(C).

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