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.
Unlock unlimited access for 12 whole months of distinctive global analysis
Photovoltaics International is now included.
- Regular insight and analysis of the industry’s biggest developments
- In-depth interviews with the industry’s leading figures
- Unlimited digital access to the PV Tech Power journal catalogue
- Unlimited digital access to the Photovoltaics International journal catalogue
- Access to more than 1,000 technical papers
- Discounts on Solar Media’s portfolio of events, in-person and virtual
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).
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.