URGENT UPDATE: Average wholesale electricity prices have plunged 27% in the September quarter, driven by a remarkable surge in renewable energy production and the rapid expansion of battery storage. The Australian Energy Market Operator (AEMO) has just released its Quarterly Energy Dynamics report, revealing that prices across the National Electricity Market (NEM) have dropped to just $87/MWh, marking a staggering 38% decrease from the previous quarter.
This dramatic fall in prices comes even as electricity demand hit record levels, particularly in states like Victoria and New South Wales (NSW). An 11% increase in rooftop solar output contributed to these trends, setting new records and pushing grid demand to unprecedented lows in NSW, Victoria, and South Australia. For the first time, grid demand even dipped to a minus 14 MW, showcasing the overwhelming capacity of rooftop solar.
The report highlights a historic high in wind generation, with a 16% increase to an average of 4,676 MW, fueled by the commissioning of new projects, including the massive Golden Plains wind project at 736 MW. Grid solar output also surged by 16%, reaching a new quarterly high of 1,699 MW.
The most significant factor impacting pricing dynamics has been the explosive growth of battery storage, which added 2,936 MW of new capacity over the past year. This has elevated average battery output by 150% to 215 MW, especially during critical evening peak hours. The surge in battery storage has resulted in a 11% decline in gas-fired generation and a 3.5% drop in hydro output, leading to a significant reduction in price volatility across the market.
The renewable energy share has now hit a record 42.7% for the September quarter, nearly 10% higher than the average from the same period last year. AEMO’s head of policy and corporate affairs, Violette Mouchaileh, noted that the electricity demand growth was driven by colder weather and an increase in electrification trends, including rising electric vehicle adoption and data center consumption.
September was particularly noteworthy, as on the 22nd, the renewable contribution reached an astonishing 77.2%, surpassing the previous record of 75.6% set in Q4 2024.
The lowest prices were observed in Queensland, where the average wholesale price fell by 28% to $72/MWh, and NSW saw a 31% drop to $90/MWh. In contrast, South Australia experienced the highest average wholesale price in the NEM at $104/MWh, influenced by a single high-priced event in early July that resulted from transmission line constraints.
AEMO attributes the stability in prices across other states to increased battery storage capabilities and the absence of major wind lulls. The organization asserts that this trend of low-cost renewable output is expected to continue, significantly reshaping the energy landscape.
As demand for renewable energy soars, consumers and businesses alike stand to benefit from these declining prices, making it an exciting time for the energy sector.
Stay tuned for more updates as this story develops.
