The Australian Energy Market Operator (AEMO) has announced that renewable energy sources supplied more than half of the quarterly energy demand in the National Electricity Market (NEM) for the first time.
Renewables, including energy storage, accounted for 51% of the overall supply in the December 2025 quarter, up from 46% in the corresponding period of 2024.
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The achievement coincides with wholesale electricity prices nearly halving to an average of AU$50/MWh (US$35/MWh) across the NEM, representing a reduction of AU$39/MWh from the December 2024 quarter.
AEMO attributed the price decline to record renewable energy generation output and increased battery storage deployment across the grid.
Grid-scale solar PV and wind output reached a new quarterly average record of 6,627MW, representing a 23% increase from the December 2024 quarter. Wind generation increased 29% while grid-scale solar output rose 15% during the period.
Western Australia’s Wholesale Electricity Market (WEM) also achieved a milestone, with renewable energy delivering an average of 52.4% of electricity generation during the quarter.
At peak periods, renewable energy supplied 91% of demand in the western grid, with wholesale prices falling 13% to AU$69.55/MWh.
The performance builds on Australia’s solar PV and storage sectors driving record Q3 2025 performance, which documented battery storage deployment accelerating with 2,936MW of new capacity and 6,482MWh of energy storage entering the NEM since the end of Q3 2024.
Meanwhile, AEMO’s Q1 2025 data showed grid-scale solar PV output increasing by 10% year-on-year, indicating consistent growth in utility-scale solar generation across the NEM regions.
Distributed solar PV, primarily rooftop installations, achieved an all-time quarterly high of 4,407MW, representing an 8.7% year-on-year increase. The rooftop solar contribution aligns with AEMO’s forecasts, which chart Australia’s rooftop solar boom to 42.5GW by 2036 and project continued rapid expansion of behind-the-meter solar capacity across residential and commercial sectors.
Battery energy storage systems demonstrated substantial growth, with average output nearly tripling to 268MW during the quarter. AEMO reported that 3,796MW of new large-scale battery capacity with 8,602MWh of energy storage was added to the grid since the end of the December 2024 quarter.
This expansion reflects the broader trend documented in Australia’s NEM seeing a record-breaking surge in renewables and energy storage assets, which highlighted the accelerating deployment of utility-scale storage projects across multiple states.
AEMO executive general manager, policy and corporate affairs, Violette Mouchaileh, described the quarter as a landmark moment for the NEM.
“This is a landmark moment for the NEM. For the first time, renewables and storage supplied more than half of the system’s energy needs for a full quarter,” Mouchaileh said.
“It reflects years of sustained investment and demonstrates that more wind, solar and battery capacity in the system reduces reliance on higher cost coal and gas generation, placing sustained downward pressure on wholesale electricity prices.”
Coal-fired generation falls to all-time quarterly low
The renewable energy milestone occurred alongside declining fossil fuel generation. Coal-fired generation fell to an all-time quarterly low, dropping 4.6% year-on-year, while gas-fired generation decreased 27% to its lowest level since the fourth quarter of 2000.
The shift away from thermal generation contributed to emissions falling to a new low of 23.4 million tonnes of CO₂-equivalent, a 6.2% reduction from the previous year.
Peak renewable energy contribution reached a new record of 78.6% during a half-hour period on 11 October, exceeding the previous record of 77.2% set in September 2025.
The quarterly results support projections outlined in AEMO’s forecast of 229TWh of renewable energy generation in the NEM by 2035, which anticipates continued growth in solar, wind, and storage capacity to meet increasing electricity demand and emissions-reduction targets.
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