Australia’s renewable energy output hit record level, helping extend the slide in wholesale power prices in the first three months of 2023, displacing fossil fuels and sending carbon emissions from the sector to new lows for the first quarter.
Renewable energy supply to the National Electricity Market (NEM) hit a record of 66% in the quarter ended March, according to the latest quarterly update from the Australian Energy Market Operator (Aemo). That was up 4.4 percentage points from the previous high.
Coal and gas, on the other hand, fell. Gas, typically the most costly fuel for electricity generation, touched its lowest level since 2005. Overall gas demand in eastern Australia fell 9%, with domestic consumption dropping to its lowest for any March quarter since 2016.
Total ENM emissions slipped by 5.1% to the lowest first-quarter levels on record.
The report showed wholesale spot prices in the NEM averaged A$83/MWh, down more than a 10th from the December quarter and two-thirds lower than the record average A$264/MWh in the June quarter last year.
Rooftop solar output alone averaged almost 3 GW for the March quarter, up 23% from a year earlier. That increase contributed to a drop in “operational demand” in the NEM to an average of 14.38 GW, or the lowest since 2005. Low demand records were set in Victoria, New South Wales and South Australia.
However, the pace of renewable energy’s advance is not yet sufficient to meet Australia’s emission goals, the Clean Energy Council said.
Last winter, authorities suspended the NEM after a cold snap and power station outages strained the grid. Wholesale prices also spiked in February and March in northern regions during late-season heatwaves, revealing shortfalls even after three relatively mild summers in a row.
New and recently commissioned grid-scale solar and wind projects pushed up generation by an average 330 MW and 134 MW, respectively, according to Aemo. Output averaged 4.65 GW, or 11% more than for the March quarter of 2022.
Coal and gas-fired generation dropped 710 MW over the year. Gas shed 20%, or 280 MW on average from a year ago, to 1.113 GW. Black coal-fired generation output eased 1.3%, or 137 MW, to about 10.5 GW, while brown coal dropped 7.4%, or 293 MW, to 3.65 GW.
Future prices for the mainland states in the NEM for the 2023-24 financial year peaked at A$230/MWh in the December quarter, before ending 2022 at an average A$102/MWh, the report said.
However, while those future prices averaged A$107/MWh during the March quarter, they ended the month on the rise.
New South Wales, which will see the Liddell coal-fired power plant close on Friday, posted the largest rise at 31% among the states to A$145/MWh.
Queensland’s future prices rose 26% to A$126/MWh and Victoria’s 25% to A$96/MWh, while South Australia’s was little changed for the quarter at A$113/MWh.