The Northern Territory has so far been spared the energy crisis faced by the east coast during a frosty winter, largely because the jurisdiction is powered by an isolated energy grid underpinned by a long-term supply agreement.
But a new report from the local industry regulator has quietly warned the territory will face its own serious hurdles as an ageing power system used to running on gas transitions to a solar-powered, renewable future.
The Utilities Commission's outlook report compared forecast energy demand with the current state of the sector, retiring energy sources and funded new investments over the next 10 years.
Its alarming prognosis is that an "increased risk of power outages" could become a reality in the NT's largest population centres from about five years time.
Experts say the report is a warning that the time to invest in a renewable future — in particular by readying the power grid for more solar — is now.
What is the problem?
The territory's power sector is already undergoing a significant transition from gas and diesel-generated power to residential and large-scale solar, as the NT government works to meet a target of 50 per cent renewable energy by the decade's end.
But the report said the territory's unique context — with small, isolated power systems and a large dependence on solar as its renewable energy source — is part of the reason it could soon struggle to keep the lights on.
The report outlines three "big risks" the system is facing.
In fact, it said it was facing the same three risks last year, and "limited progress" has been made in the 12 months since.
Those are:
- The retirement of six gas-fired generators in Darwin and three in Katherine from 2026
- The need for the government to speed up electricity market reforms, including some intended to support the renewable energy target
- Forecast shortfalls in generation capacity — that is, how much energy a system can produce — to meet system security requirements in Darwin/Katherine and Alice Springs
The report's authors warn of an increased risk of outages from 2026-27 in Alice Springs and the following financial year in Darwin and Katherine.
"This signals the need for urgent investment in new generation, storage and or demand response," the report said.
Some issues with the local switch to renewables are already well publicised — including the case of four Top End solar farms that were recently sitting idle long after they were constructed.
Is my power bill set to climb?
The paper also makes no secret of the fact that generating power could become more costly without urgent action, or at least lead to rushed decisions.
While the NT government sets maximum prices for electricity retail in the NT, it's possible consumers could bear the brunt of the problem in one way or another.
"Delays in meeting the emerging challenges and opportunities mean less time to respond, which may increase risks and costs, and may ultimately negatively impact Territory electricity consumers and taxpayers," the report says.
Jason Fowler, who specialises in energy with the Environment Centre NT, said the obvious solution was to invest in technology that could use renewable energy to keep the system secure.
"We need to invest now in big batteries and system control, and that's an investment in the future, which means we'll have lower power prices to come," he said.
"The main reason for this is the operating costs of our grid will get less and less and less over time if we convert to renewables."
Ironically, the NT government's recent decision to reduce solar feed-in tariffs — which lowered the amount of money paid to consumers for feeding electricity back into the grid — is credited in the report with improving the grid's stability.
That's because more people are now expected to use that solar energy around the home rather than feeding it back into the grid, thereby delaying some energy security issues associated with the rapid shift away from gas and diesel generation.
Separately, work is well underway to frack the gas-rich Beetaloo Basin, but it's unclear how much of the region's gas will be reserved for local use.
What are the solutions?
Since the last outlook, both the government and the territory's electricity generator have released plans laying out the path to a renewable future.
The government's plan in particular relies on new, large-scale solar generators and new large-scale batteries to bring the Darwin-Katherine electricity grid to the 2030 target.
While acknowledging these plans, the Utilities Commission took a "business as usual" approach to the outlook and deliberately excluded some of them from its latest report.
It said plans that weren't fully funded or were particularly ambitious didn't provide "sufficient assurance" they would rise to the various challenges facing the local grid.
Mr Fowler praised the government's work so far but said the Utilities Commission had given it a mandate to back it up with investment.
"It highlights how the minister needs to step up here and actually put some funding into transferring our grid, so it's ready for renewables," he said.
