Australia's electricity prices fall as renewables grow

Prices in Australia’s National Electricity Market (NEM) came down to historical levels in the third quarter of 2023, driven by renewables, the Australian Energy Market Operator (AEMO) said on Monday.

Renewables, including wind, grid-scale solar, rooftop solar, hydro and other sources, provided 38.9% of total supply, an increase of 4.6 percentage points compared to the third quarter of 2022.

“Record renewable generation output helped push down average wholesale electricity prices by more than two-thirds, double the occurrence of zero or negative wholesale prices (19%) and reduce total emissions by 11% compared to the previous September quarter,” said AEMO executive general manager Reform Delivery Violette Mouchaileh.

Wholesale electricity prices in the NEM averaged AUD 63 per MWh in the three-month period, a fall of 41% from the June quarter and 71% from a year ago. By region, the average quarterly price per MWh was AUD 92 in South Australia, AUD 81 in New South Wales, AUD 65 in Queensland, AUD 49 in Victoria and AUD 29 in Tasmania.

In the September quarter, warmer weather and higher distributed solar generation reduced operational demand, AEMO said in its Quarterly Energy Dynamics report.

The maximum rooftop solar output hit a record 11.9 GW, 3% above the previous record. The maximums for grid-scale solar and wind rose 7% and 10% to 5,949 MW and 8,040 MW, respectively.

“The pipeline of new renewables, if supported by firming generation – batteries, hydro and gas – and transmission, will help meet reliability gaps and share low-cost, low-emissions energy to homes and businesses,” according to Mouchaileh.

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