Utilities Commission warns of blackouts unless investment in NT electricity grid increases

The NT Utilities Commission says significant investment is needed in renewable energy. (ABC News: Hamish Harty)

The Northern Territory's electricity system is in a "prime but precarious" position and could face blackouts within four years if looming challenges are not met, according to the NT Utilities Commission.

The independent electricity regulator repeated previous warnings of "forecast shortfalls in capacity" in its annual Electricity Outlook Report, released this week.

"Issues stem from planned generation fleet retirements and increases in behind-the-meter residential and commercial rooftop solar PV," the report said.

"These challenges and risks are now one year closer."

A major liability on the horizon is the ageing generators at the Channel Island power station near Darwin.

The generators due to be shut down represent about 35 per cent of the generation capacity in the Darwin-Katherine grid.

"Without timely solutions to address the expected retirement of 185 megawatts of generation capacity … customer demand may not be met within four years," the report warned.

The Alice Springs power system also faces "challenges in maintaining a reliable and secure power system" due to "assumed high outage rates at the Owen Springs power station and the expected retirement of the Ron Goodin power station by the end of 2025".

The NT's electricity grid has also faced issues with insecure gas supply, which cost taxpayers $43 million in 2023–24 and is set to cost a further $24 million next financial year.

In April, the NT government signed a deal to buy gas from the Beetaloo Basin for nine years in an effort to shore up its supply.

Significant investment needed to keep lights on

Utilities Commissioner Lyndon Rowe said "significant" public and private investment was needed "to make sure the lights stay on".

"It's a message we've been giving for a number of years now," he said.

"We take a little more comfort in the past 12 to 18 months that there's been some more action.

"But the commission's view is that we don't have a lot more time."

The report outlined issues with long lead times for sourcing new generation assets and prolonged issues with commissioning new solar farms, "many of which are not yet fully operational or are experiencing teething issues years after installation".

50 per cent renewables target at risk?

The Utilities Commission also warned more investment was needed to reach the NT government's goal to have 50 per cent of electricity generated from renewables by 2030.

"If we are going to get to that target, we need to get on with it," Mr Rowe said.

"The target can be achieved but we shouldn't underestimate the investment needed to do that in a way which keeps the light on, and we shouldn't underestimate the urgency of moving forward on this."

In 2023, just 6.6 per cent of the NT's electricity came from renewable sources, according to data from the federal Department of Climate Change and Energy.

Infrastructure changes to accommodate renewables

This week, the NT government announced Territory Generation — the publicly owned corporation responsible for producing electricity — was working to install new infrastructure to accommodate more renewable energy.

Territory Generation will convert one of the gas turbines at the Channel Island power station to operate as a synchronous condenser — a machine to provide reactive power to compensate for changes in solar electricity output.

Territory Generation chief executive Gerhard Laubscher said the turbines being replaced had been in operation for more than 40 years.

"Territory Generation is excited to repurpose an existing asset to contribute to the future energy requirements of the power system," he said.

"The Channel Island power station synchronous condenser conversion project aligns with Territory Generation's Fleet Transition Plan while advancing Northern Territory government renewables and emissions objectives."

In March, construction on a $45 million "big battery" at Channel Island was completed with commissioning expected to be completed before the end of the year.

The 35-megawatt volt Battery Energy Storage System is designed to replace some gas-fired generation and support increased solar in the grid.