SYDNEY, March 23 (Xinhua) -- Despite an abundance of coal and gas resources, a new report from Australia's energy regulator on Friday warned Sydney and the state of New South Wales (NSW) could face rolling blackouts in the coming years.
The fear from the Australian Energy Market Operator (AEMO) stems from the upcoming closure of a coal-fired power facility -- Liddell Power Station in the Hunter region.
Commissioned in 1973, the AGL operated plant has a capacity of around 1,800 megawatts which represents over 10 percent of the state's power supply.
When the company announced last year that they planned to shut the power station down by 2022 due to spiralling costs, the Australian government met with the energy provider to address the inevitable shortfall that would arise from the closure.
As a result of the meeting, AGL committed to a three stage plan to increase new generation, with investment in gas, hydro electric power, solar and demand management.
But at this stage the AEMO pointed out that AGL had only followed through on the first stage of their plan, funding a move to increase capacity by 100 megawatts at their Bayswater power plant.
"Without the entirety of AGL's plan or comparable investment in resources by others, there remains a high risk of load shedding following the closure of Liddell," the report said.
"Specifically, the analysis shows that once in every three years, approximately 200,000 households in NSW may experience power outages lasting five hours," it said.
Australian Minister for environment and energy Josh Frydenberg said in a statement "it would be preferable for AGL to commit as soon as possible to the next stages of their plan."
"The existence of a major shortfall in dispatchable power following Liddell's closure would clearly present an unacceptable situation undermining the stability of the system."
During 2016, the fragility of the country's electricity grid was highlighted when a storm damaged three of the four interconnectors used to supply South Australia with power.
For several days, much of the state was blacked out.
"It's not the fact that the wind isn't blowing or the sun isn't shining, the big old power stations fail unexpectedly because they are becoming so expensive to maintain and keep operating," sustainable energy development expert at the University of Sydney Professor Anthony Vassallo said to Xinhua.
"It's structured around big, remote, fossil-fueled power stations and it's the wrong system to be looking for the future because the sooner they are replaced by the newer technologies like renewables and potentially gas with storage batteries, the less problems we are going to see," said the professor.