Solar growth continues to erode coal market share in Australia as prices soar

Facebook
Twitter
LinkedIn
Reddit
Email
Despite solar PV and wind energy accounted for 33.7% of electricity generation in Australia during Q1 2022, average prices rose sharply to AU$87/MWh. Image: Genex Power.

Solar PV and other renewables account for more than a third of electricity generation in Australia’s National Energy Market (NEM) in Q1 2022, coal’s share slipping by five percentage points year-on-year.

But average prices sharply increased to AU$87/MWh (US$60.23/MWh), driven by high gas prices, demand outstripping supply, outages at thermal units and constrained north-south power sharing, the latest edition of Australian Energy Market Operator’s quarterly energy dynamics report has shown.

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 average wholesale electricity spot price in the NEM sharply increased to AU$87/MWh from AU$52/MWh in the previous quarter, its highest price since Q2 2019’s AU$89/MWh (see chart below).

NEM’s average wholesale electricity spot price for Q1 22 sharply rose to AU$89/MWh.

Despite the increase of average price for the first quarter of the year, renewable energy generation managed to continue the trend of the previous quarter and set operational demand records, with periods reaching zero or negative prices during Q1 2022.

Average grid-scale solar generation set a new quarterly record with a high of 1,504MW, a 214MW increase from the previous record set in Q4 2021, due to an increase of installed capacity from solar PV during the first three months of the year and increased solar irradiation in some regions.

An increase largely driven by New South Wales with more than 292MW added, followed by Queensland (+97MW) and Victoria (+35MW).

Increased output from grid-scale wind and solar generators (+743MW) and distributed PV (+460MW) contributed to renewables taking its market share to 33.7% in the NEM for Q1 2022.

Furthermore, distributed PV has continued to play an increasingly important role in the Australian energy mix and the dynamics of the NEM markets, with supply of distributed PV reaching 10% of the total mix, an increase from the 8.3% of Q1 2021.

Queensland reached an all-time high demand of 10,058MW on 8 March and experienced several instances of high demand and price volatility during Q1 2022, with coal dominating daytime prices.

Average spot prices during two days in the Q1 in the region were amongst the 10 highest ever recorded by NEM in Queensland with spot prices above AU$1,000/MWh, and with an average region price of AU$150/MWh in Q1 2022.

Read Next

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.
September 8, 2025
France has awarded 971MW of ground-mount solar capacity, to 165 projects, in the eighth round of the PPE2 PV tender.
September 5, 2025
Research firm Rystad Energy has found that Queensland’s utility-scale solar PV power plants have dominated the best-performing assets, in terms of AC capacity factor, rankings for August 2025.
September 4, 2025
ARENA has launched the second funding round of its AU$1 billion Solar Sunshot programme, making AU$150 million available.

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