The Northern Territory (NT) stands at a pivotal juncture in its energy future. While embracing the ambitious goal of 50% renewable energy by 2030, the region faces unique and complex challenges that pose significant reliability risks to its interconnected systems, particularly in Darwin-Katherine and Alice Springs.
These risks stem from the inherent nature of small, isolated grids, the rapid uptake of variable renewables, and the looming retirement of older thermal generation assets. Proactive investment and innovative solutions are essential to ensure a secure and stable electricity supply for Territorians in the years ahead. This blog post explores the key risks and the crucial strategies needed to mitigate them.
The reliability triple threat: Generation, network, and climate
A combination of issues across generation adequacy, ageing network infrastructure, and climate impacts threatens the future reliability of the NT’s power supply. Addressing any one of these in isolation won’t be sufficient; a holistic approach is mandatory.
1. Generation adequacy and dispatchability
The most significant risk to supply adequacy lies in the expected retirement of significant thermal generation capacity, most notably at the Channel Island Power Station in the Darwin-Katherine system. While new large-scale solar farms are coming online, they cannot supply power when the sun isn’t shining, particularly during peak demand in the late afternoon or early evening.
- Thermal generation retirement: The planned decommissioning of gas-fired units removes crucial, dispatchable power used to balance the system. The 2023 Northern Territory Electricity Outlook Report (NTEOR) highlighted that, without timely replacement, this poses a high risk to customer supply in the medium- to long-term, especially in the Darwin-Katherine Interconnected System (DKIS).
- Minimum demand management: A new record for minimum system demand has been set, driven by the massive uptake of behind-the-meter solar PV (rooftop solar). This oversupply of solar during the middle of the day can create system security issues, potentially forcing system controllers to curtail solar output to maintain safe operating limits.
- Lack of firming capacity: To reliably meet the 50% renewables target, the NT needs substantial, dispatchable capacity that can quickly ramp up when solar drops off. This includes utility-scale battery energy storage systems (BESS) and synchronous condensers to provide inertia and system strength.
2. Ageing network infrastructure
Much of the NT’s electricity network was built following Cyclone Tracy in 1974, meaning a large cohort of critical assets is now reaching or exceeding their expected technical life. Asset management risks are a key area of focus for Power and Water Corporation (PWC).
- Asset deterioration: Ageing high-voltage cables, transformers, and switchboards across the Darwin-Katherine and Alice Springs networks increase the risk of equipment failure, leading to unplanned outages and higher maintenance costs.
- Network modernisation: The existing network was designed for one-way power flow from large, centralised generators. Enabling the two-way flow required by large-scale, distributed renewable energy requires significant investment in smart grid technology and network upgrades.
- Geographic vulnerability: The long distances and low population density in remote areas mean rural customers already experience disproportionately long and frequent outages. The capital expenditure required to improve reliability in these areas is high.
3. Climate change and extreme weather events
Located in a monsoonal and cyclonic region, the NT is highly susceptible to climate-related reliability risks. Climate change is forecast to increase the intensity of cyclones, high-fire-risk days, and flood events over the coming decades.
- Increased outages: Extreme winds, flooding, and high temperatures can severely damage overhead lines and substations, the main causes of weather-related outages.
- Reduced efficiency: Higher ambient temperatures reduce the efficiency and capacity of thermal generators and can strain transmission and distribution equipment, compounding the problem during periods of high demand.
Solutions and mitigation strategies
Mitigating these complex power reliability risks requires a multifaceted strategy that focuses on new technologies, regulatory reforms, and robust infrastructure planning.
1. Investing in storage and flexibility
Large-scale energy storage is the linchpin of the transition. The Darwin-Katherine system, for instance, has a BESS project underway, but more is needed to provide the essential system services required to integrate high levels of variable solar.
- Utility-scale batteries: BESS provides rapid response to frequency and voltage deviations, helping to smooth out the intermittent nature of solar. This dispatchable resource can quickly charge during the day and discharge to meet the evening peak.
- Synchronous condensers: These devices are being deployed to provide the necessary inertia and system strength that is lost when traditional generators retire.
2. Grid modernisation and digitisation
An upgrade to a smart grid is essential for managing the complexity of a decentralised power system. This includes advanced monitoring and control systems.
- Dynamic operating envelopes: Implementing dynamic management enables maximum rooftop solar export at all times, without static limits, by intelligently controlling output when network security is at risk.
- Transmission augmentation: New transmission lines and upgrades are required to connect new renewable energy zones and ensure power can be delivered where it’s needed, particularly into the main demand centres of Darwin and Alice Springs.
3. Proactive planning and regulatory alignment
The regulatory and planning frameworks must be agile enough to support the rapid pace of the energy transition. The Utilities Commission and PWC are working on long-term network strategies to achieve this.
- Long-term asset management: Implementing robust risk management and targeted replacement programs for ageing assets is crucial to prevent catastrophic failures.
- Demand-Side Management (DSM): Incentivising customers to reduce or shift their electricity use during peak periods can significantly reduce the strain on the system, making the available generation more adequate.
Snapshot of key information
| Risk area | Why it matters | Short-term action |
| Ageing gas plants | Failures reduce dispatchable capacity | Prioritise maintenance and replacement planning. |
| Network constraints | Limited redundancy magnifies outages | Fast-track high-value feeder upgrades. |
| Extreme weather | Infrastructure damage, extended outages | Improve undergrounding & emergency plans. |
| Fuel/gas security | Price and supply risk for thermal plants | Secure fuel contracts & diversify firming. |
| Rooftop solar growth | Voltage & minimum demand challenges | Add solar battery storage and voltage control devices. |
Sources: NT Utilities Commission – Northern Territory Electricity Outlook Report Update 2024, NT Power System Performance Review 2023–24 | AEMO – Quarterly Energy Dynamics Q4 2024 (January 2025)
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How Energy Matters can help
The Northern Territory is charting a course toward a renewable energy future, but it must address significant power reliability risks ahead. The confluence of retiring thermal generators, solar variability, isolated grids, and the threat of extreme weather creates a complex security challenge.
Only through strategic, timely investments in energy storage, grid modernisation, and proactive regulatory measures can the NT achieve its clean energy goals while maintaining a reliable and secure electricity supply for all its residents and industries—partner with Energy Matters to drive the Territory’s sustainable, secure energy transition.
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