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South Australia’s renewable-heavy grid now has the country’s lowest wholesale electricity prices

January 29, 2021

Renew Economy:

South Australia – maligned by conservatives over the world-leading share of wind and solar in its grid – now boasts the cheapest wholesale electricity prices in the country, even as it reaches “world first” levels of 100 per cent solar power.

The Australian Energy Market Operator, in its latest Quarterly Energy Dynamics report, confirms that South Australia – as first reported exclusively by Renew Economy three months ago – served all of its electricity demand for more than an hour shortly after mid-day on October 11 through rooftop and utility scale solar.

AEMO says this is a world-first in a grid of this size, and occurred in a December quarter when South Australia posted the lowest wholesale electricity prices in the country – thanks to the growing share of wind and solar and the increase in rooftop solar PV which is reducing grid demand. 

“South Australia’s quarterly average price fell 57 per cent to $29/MWh, representing its lowest average since Q2 2012,” AEMO says, adding that these continued price reductions “were largely a function of its lowest quarterly average demand on record, and increased wind and solar output in Victoria and South Australia (328 MW on average).”

AEMO points out that the growth in wind and solar has allowed some states, for the first time, to break the nexus between gas prices and electricity prices. So, while gas prices have been going up, mostly due to events in international markets, local electricity prices have been mostly falling, thanks to the increase in wind and solar.

Across the main Australian grid, known as the National Electricity Market, AEMO says that increased coal-fired generator outages, coupled with low operational demand, and increased wind and solar shaped the NEM supply mix. Average black coal-fired generation decreased by 707 MW over the same period a year earlier, reaching its lowest level since late 2014.

[Giles Parkinson]

More: “World first”: South Australia achieves 100pct solar, and lowest prices in Australia

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