Solar and wind push wholesale power prices to record lows in Australia

Facebook
Twitter
LinkedIn
Reddit
Email
Southend, South Australia. Source: Flickr, Holiday Point

The uptick of renewables in Australia has helped bring about three-year lows for wholesale electricity prices on the country’s largest power market.

In its quarterly market report published Monday, Australia’s Energy Market Operator (AEMO) noted that prices on the National Electricity Market (NEM) dipped to AU$72/MWh (US$48/MWh) in the final quarter of 2019.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

The price average, a 20% drop from the year prior, was driven by increased solar, wind and gas-powered generation, according to AEMO.

Combined grid-scale solar and wind output increased by 39% in Q4 2019 compared to Q4 2018, while coal generation dropped to the lowest level recorded since 2016.

Variable electricity (VRE) generation accounted for 14% of the supply mix on the NEM, up from 10% the year prior.

Australia saw its hottest and driest year on record in 2019. Extreme heat and ongoing bushfires have wreaked havoc on generator and transmission lines and prompted AEMO to activate AU$3.5 million (US$2.3 million) worth of reserve energy contracts in 2019 Q4.

System strength constraints in South Australia, transmission outages and other network constraints contributed to record high levels of renewables curtailment on the NEM in Q4 2019. Curtailment rates increased to 6% of total VRE output.

The biggest contributor to the unprecedented levels of curtailment in Q4 2019 was system security constraints enforced by AEMO on four solar farms in Victoria and a farm in New South Wales in mid-September, according to the update.

“The main increase compared in Q4 2019 to Q3 2019 was the impact of the VIC/NSW solar constraint, with an estimated average curtailment of 75 MW, up from 14 MW in Q3 2019. The increase was due to the constraint being in place for the entire quarter – compared to less than one month in Q3 2019 – as well as sunnier Q4 conditions,” the report notes.

Rooftop PV disrupts energy mix in Western Australia; record revenues for storage

It was a quarter of records for the Western Australia Wholesale Electricity Market (WEM), which recorded its highest ever level of renewables penetration on 30 November when combined wind, grid-scale and rooftop solar covered 51% of system demand.

The power system also set a new all-time minimum demand precedent on 13 October, when output from rooftop PV covered 43% of electricity demand, and grid demand plunged to 1,159MW.

Conversely, as temperatures skyrocketed to 39 degrees C in December, the grid recorded its highest demand for electricity in Q4 on record.

Meanwhile, market revenue for grid-scale batteries hit AU$20 million (US$13 million), 70% higher than the previous record, due to increased returns in frequency control ancillary service (FCAS) markets.

AEMO said that higher prices, increased market share and events in South Australia related to the islanding (or perceived risk of islanding) of its electricity grid drove the FCAS revenue surge.

Read Next

September 15, 2025
UNSW spin-out company Lab360 Solar has been awarded funding from ARENA to bring its drone-based PV inspection technology to market.
September 15, 2025
Australia has reached 26.8GW of installed rooftop solar at the end of the first half of 2025, according to a report from the Clean Energy Council (CIC).
September 10, 2025
Voltalia is seeking compensation for the ongoing curtailment of its Brazilian solar and wind fleet, which has exceeded expectations this year.
September 10, 2025
The CEFC has said that a coordinated approach to transmission in Pilbara, Western Australia, could save more than AU$30 billion over 25 years.
September 9, 2025
The US is forecast to reach between US$55-60 billion in clean energy tax credit monetisation in 2025, according to a report from clean energy financing technology platform Crux.
September 9, 2025
Australia's National Electricity Market (NEM) broke records yesterday when renewables supplied 76.4% of total electricity demand, with solar power contributing nearly 60% of the record-breaking clean energy mix.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines