Skates on to ensure secure exit of major coal plant

Australia's main energy grid is not on track to smoothly manage the closure of the nation's biggest coal station without the faster rollout of stabilising technologies.

The Australian Energy Market Operator warned the Eraring Power Station in NSW is slated to retire before important security infrastructure is due to come online to ensure a "stable heartbeat".

Enough grid-regulating machines are forecast to come online by 2028, according to the operator, after Origin Energy's Eraring station is scheduled to retire in 2027.

AEMO chief executive officer Daniel Westerman said there was a risk of blackouts, at the extreme, but stressed relevant players were working hard to avoid security issues.

"The government, Origin and TransGrid - the transmission company - are all working very collaboratively to make sure that there is no disruption to consumers," he told ABC Radio on Monday.

AEMO has been calling for investment in synchronous condensers, big spinning machines that help the grid withstand shocks and disruption, since 2021 to coincide with the closure of ageing coal generators.

They are key pieces of kit in the shift to a renewables-powered electricity system rather than one dominated by emissions-intensive coal generation.

AI Group climate change and energy director Tennant Reed said under a worst-case scenario, the consequences of a loss of system security would be "very large".

But he said it was possible to close the gaps identified by the grid operator.

"The problems are solvable," he told AAP.

"AEMO is saying, 'look, the system definitely needs additional resources beyond what's currently expected to be ready for 2027, and so everybody get on with it'."

Queensland has also been warned it is at risk of occasionally having too much rooftop solar and not enough demand for it, which could leave the system unstable.

Unlike in South Australia, where the market operator can forcibly turn off solar systems as a last-resort backstop, it cannot do that in the Sunshine State.

Virtual power plants - which connect batteries and other distributed energy resources in a shared network - can also help resolve the "minimum demand" issue by shifting supply that would otherwise be pumped into the grid at noon for use later in the day.

The Clean Energy Finance Corporation has recognised the grid stabilising and efficiency benefits of virtual power plants, investing $35 million into a Western Australian startup Plico to offer discounted loans to customers nationwide interested in installing batteries and solar, and participating in the networks.

As well as helping improve the reliability and stability of electricity grids, proponents promise power bill savings for participates.

Plico chief executive officer Robbie Campbell said customers had both the benefits of their own solar and battery systems, as well as the advantages of making good money from their exports.

"It's a win for the customer, it's a win for the grid, and it's a win for for us as well, because we provide the service," he told AAP.