Solar additions drive record low electricity costs in South Australia

Apr 28, 2021 07:40 PM ET
  • South Australia saw record low daytime energy costs in the very first 3 months of this year, driven by a sharp uptake in renewable power sources, consisting of rooftop solar.
Solar additions drive record low electricity costs in South Australia
Image: Flickr/Michael Coghlan

That's according to the Australian Energy Market Operator's (AEMO) most recent quarterly report, which stated that light summertime temperature levels and record Q1 installments of rooftop solar ability resulted in a 3% fall in average functional need from the National Electricity Market (NEM) at the start of 2021.

The report also discovered wholesale electricity costs drops approximately 68% during the very same duration, lowering South Australia's typical quarterly electricity price by AU$ 10/MWh (US$ 7.75/ MWh).

Violette Mouchaileh, AEMO's primary markets police officer, said the last quarter saw much less rate volatility than previous years as well as more quantity of low-cost coal as well as hydro generation, in addition to a 29% per cent increase in wind and solar generation "all contributing to lower wholesale prices."

South Australia's average daytime costs fell below zero continually between 10am as well as 3:30 pm (AEST) during the quarter, averaging at -AU$ 12/MWh for the first time in NEM's background, Mouchaileh said.

The report kept in mind that the decrease marked the very first quarter "throughout the NEM" that the ordinary daytime cost had fallen below zero "on a regular basis".

Victoria saw the largest area price decreases, the report found, dropping from $79/MWh to simply $25/MWh, its most affordable quarterly rate in nine years. Rates in New South Wales also fell from AU$ 86/MWh to $38/MWh, while Queensland's quarterly ordinary gotten to UA$ 43/MWh.

South Australia has become a hotspot of renewable resource implementation, especially solar, over the past year. Australia's PV boom and also changes in energy use last year drove electricity demand to record lows. AEMO's Q3 2020 report located that distributed PV met 71% of South Australia's complete energy needs on 13 September, driving a new daytime minimum need record of 379MW. As well as in the latest quarter, combined wind and also solar offered 786 MW of the boost in low-priced deals, according to AEMO. This, it claimed, was "mainly driven by new capacity enhancements and also increase existing capacity".

The first three months of the year, the report said, saw increased periods of "very high Victorian and South Australia [variable renewable energy] result", driven by more capacity installed in Victoria. Because of this in Q1 this year, Victoria and South Australia's cumulative renewables result was above 2.5 GW 11% of the time, compared to 4% in Q1 the previous year.

Nevertheless, this has actually in-turn placed more stress on gas-powered generation systems to supply grid security. Mouchaileh noted that negative electricity rates between January as well as March "required AEMO to route South Australian gas-powered generations on for system safety and security for a record 70 percent of the quarter."

Nevertheless, developers are likewise significantly wanting to add more battery energy storage space systems (BESS) to the region's grid to offer low-emissions stability. Last September, independent power producer Neoen trebled the capability of its Hornsdale utility-scale battery in South Australia, an upgrade the business said will reduce the dangers of blackouts.

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