Renewables have broken new records in the national electricity market but vulnerabilities remain, according to the latest quarterly report from the energy market operator.
On November 6 last year, renewables provided three-quarters of all the power in the grid for a half-hour period for the first time.
The National Energy Market includes all states bar Western Australia and the Northern Territory.
It’s primarily due to a surge in solar power, with output from rooftop solar up 18 per cent and grid-scale solar up 9 per cent.
Almost a quarter of the time, the volume of solar power in the grid pushed the spot price for power below zero — meaning generators were paying major users to consume power, rather than the other way around.
But despite the renewable surge, wholesale prices were up 88 per cent for the last quarter of 2024 compared to the same period in 2023.
The market operator primarily puts that down to a return to more normal, warmer weather in late 2024, compared to an unusually cool end to 2023.
Planned outages in coal-fired power plants also caused some problems, highlighting vulnerabilities in the grid as it transitions to accommodate more renewables.
The market operator has noted that record low outputs from both black and brown coal generators in the grid pushed up wholesale prices overnight, and contributed to major price spikes in November and December.
One such spike occurred on November 27, when the energy market operator (AEMO) issued a warning that a heatwave could place enormous pressure on the grid.
New South Wales Premier Chris Minns asked residents to avoid running large appliances, like dishwashers and washing machines, for a few hours to ease pressure on the grid.
During that incident the wholesale power spot price hit the market cap of $17,500 (the average for the quarter was $88).
Demand for power climbs to new highs (and falls to new lows)
The end of last year also saw new records set at both ends of the demand spectrum.
Warm temperatures and the ongoing electrification of household appliances pushed demand for power to new highs for the last three months of the year, up more than two per cent on the year prior.
But at the same time, the volume of solar power being generated on rooftops pushed demand to record lows at other times during the period.
For the first time, coal made up less than half of the power consumed in the national energy grid, while renewables made up 46 per cent.
Coal plants not only provide electricity — they also help keep the grid strong. (Supplied: AGL)
Violette Mouchaileh from AEMO said there was significant variability between wholesale prices in northern states and southern states, highlighting the need for new transmission projects to move power around the country.
“Recent operating conditions highlight the role new transmission projects underway — such as VNI West, Project EnergyConnect and HumeLink — will play in sharing the lowest-cost energy throughout the NEM,” she said.
Bowen claims coal ‘unreliability’ pushing up prices
Debate over the future of the national energy grid is going to be a major theme of the looming federal election, with Labor and the Coalition presenting very different pitches.
The Coalition has argued an over-reliance on renewables will destabilise the grid, and require an unnecessary over-investment in transmission lines.
It seized on headlines around leaders urging households not to run dishwashers to warn the grid was becoming unreliable, as coal was phased out and replaced by renewables.
Energy Minister Chris Bowen says more renewables in the system bring wholesale prices down. (AAP: Mick Tsikas)
It is pitching nuclear power as an ideal replacement for coal-fired generation, while Labor argues nuclear power is unfeasible and overly expensive.
Energy Minister Chris Bowen said AEMO’s latest figures support Labor’s renewable-led plans.
“The data confirms what we know — unreliable coal is having a negative impact on energy prices, more renewables in the system bring wholesale prices down, and new transmission infrastructure is critical to keeping prices lower.
“We are building an energy grid so everyone, everywhere has access to the cheapest form of energy at any given time.”
