Scaremongering won’t keep Australia’s lights on. Picking up the pace of energy transition will | Dylan McConnell

Endless headlines forewarn of imminent blackouts across the country. This is now a regular, and unfortunate, feature of coverage surrounding the reliability of the electricity sector.

On Tuesday, the operator of the National Electricity Market issued an update to its assessment of system reliability, known as the "electricity statement of opportunities". This update does indeed show a significant deterioration in the reliability outlook. However, a deterioration in reliability outlook is not the same as saying blackouts are imminent or unavoidable. This news is certainly no reason to slow down the transition under way in the electricity sector. If anything, the findings of the report suggest - and indeed urge - that we need to speed up our transition to renewables.

Reliability is a term thrown around in debates about energy but it is not necessarily well understood. Put simply, it is a measure of the ability of the power system to supply customers with the power they need. A reliable power system supplies power to customers when they need it.

Every year, the market operator prepares an assessment of the reliability of the power system over the next decade. It does this by assessing the ability of the power system to supply projected demand. This is based on a conservative appraisal of what projects will be delivered and online in this period, whether they be storage, generation or transmission. The assessment then highlights where there is expected to be "unserved energy" in the future - that is, energy demand that isn't met, which is popularly reported as blackouts. This assessment helps inform a response, to guide investments and other interventions to ensure demand is actually met, preventing any blackouts.

This is to a large degree the point of this report. That is, the aim of the assessment is to identify when and where there might be insufficient supply to meet the expected demand, in order to prevent them from occurring. The projections of "blackouts" assume no action is taken, which belies the point of the report. There are also additional tools and levers available to the market operator to help meet demand, including contracting interim reserves, and other emergency mechanisms that further reduce the likelihood of actual blackouts.

On occasion, when there is a material change in circumstances (for example, the announced retirement of a major power plant), the market operator updates its assessment. This latest report is such an update, triggered among other things by delays to the delivery of a transmission link between NSW and South Australia.

It is fair to say that things aren't looking great in the short- to medium-term, particularly for NSW, with the projected supply shortfalls considerably increased from the last assessment. This is partly driven by changes to demand projections, delays to battery projects and transmission projects, and in the context of the supposed retirement of Eraring coal-fired power station in late 2025.