Electricity procurement technologies in Australia, both for end customers and for producers in supply chain

electricity procurement in australia

New technologies and the impact they are having on Electricity procurement in Australia, both for end customers and for producers in supply chain. What is in the future?

There are the some future considerations which will have a huge impact on the electricity future of Australia. There is a significant amount of contribution of coal and gas in electricity generation in the immediate future. But they will come under increased pressure from climate target constraints, community expectations and renewable energy advancements.

Electricity Procurement:

Transforming Australia’s electricity generation is not a matter of choosing one technology for the future. It is using a combination of existing and emerging technologies and this must coincide with new policy approaches. Without a suitable approach to navigate an energy transition, Australia’s energy system will be unable to efficiently and securely integrate the diverse technologies (Stewart, 2017). The International Energy Agency defined the energy security as the uninterrupted availability of energy sources at an affordable price. Increasingly, energy security is a contested concept and different stakeholders have different perceptions.  What energy security is, and how it can be achieved?


Challenging the narrow definition of energy security will enable planners of the future Australia electricity supply. Which assess and adapt to a wider range of vulnerabilities? Energy security for electricity generation is a multi-dimensional concept, which demonstrates issues across the social, political, economic and environmental spectrum. The discussion about energy security in the context of electricity generation is too narrow and can miss the broader issues. The 28 September 2016 blackout in South Australia has brought the issue of energy security back into the public discourse. The Australian government has since publicly spoken about energy security priorities for state governments.

Electricity Procurement Security:

The recent discussions about energy security have predominantly focused on the lack of a traditional base load power production, without looking at the issue from a holistic approach (Stewart, 2017). Firstly, a secure energy future will be reliant on a diversity of energy options including renewable energy production, connectivity between state borders so energy can be traded, and the development of smart-grids to help strengthen resilience. This means the discussions about energy security should not only be about traditional base load power production, but also the ability of households, businesses and government to accommodate energy market supply disruptions (Stewart, 2017).

Base load power that was supplied by fossil fueled power stations needs to transition to a mix of energy options that, combined, are capable of providing the equivalent of the traditional base load power. If there is going to be fluctuations in energy generation in the future, they will need to be balanced with alternative generation options which have the ability to supply power on demand (Stewart, 2017). System inertia, frequency and system voltage are such parameters which maintained electricity security system. These parameters control narrow ranges to avoid major disruptions to power supply.

There are technical solutions that can be applied to increase grid security and reliability including synchronous condensers, synthetic inertia, power conversion systems and fast interruption of loads to correct demand and supply imbalances (Stewart, 2017). The engineering profession can play a lead role in the successful adaptation and implementation of these technical solutions. Secondly, a key goal of energy security agenda should be to reduce vulnerability and improve resilience of energy supply systems.

Future of Electricity Procurement:

The current grids over reliance on twentieth-century technology based on centralized power generation and distribution will create future systemic vulnerabilities. The transmission network plays a critical role through providing a highly reliable energy balance in extensive range of operating conditions. It also plays a key role in ensuring that power system security can be retainer. The potential of smart grid technologies with emerging energy storage systems can increase generation and distribution resilience.

Thirdly, policy makers should also give much greater attention to reducing energy consumption through energy efficiency. The reduction in total consumption of energy is one of the most cost-effective methods of improving energy security. By consuming less energy, it reduces vulnerability to both demand and supply shocks. It reduces the national energy bill, and improves environmental security through reducing emissions (Stewart, 2017).

To meet these challenges there will also need to be significant investment to maintain reliability while transforming the sector. Investing in energy infrastructure is an expensive and long-term proposition. To develop this infrastructure, energy producers need to have security of demand to justify the investment. Producers are concerned about demand shocks due to their investment which decreasing their financial returns (Stewart, 2017).

According to Engineers of Australia these challenges can be resolved through ongoing market reforms along with assistance mechanisms. This is the federal government responsibility to implement such reforms. Energy policy makers should avoid unnecessarily increasing vulnerabilities, threats and risks in the energy sector that affect electricity generation. Regulators and Government must plan for this disruption now or risk not being able to meet future demand. The future events cannot have shocking impact on electricity procurement in Australia without a plan for a reformed energy grid.


stewart, M. (2017). the future of Australian electricity. Institution of Engineers Australia. Engineers Australia.



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