Mild summer temperatures, coupled with record installations of rooftop solar capacity in the first three months of the year has led to a 3% drop in average operational demand from the National Electricity Market (NEM), the Australian Energy Market Operator said in its Quarterly Energy Dynamics. The drop amounted to lowest operational demand since 2002.
In fact, the first quarter saw record low average operational demand in the majority of the regions in the NEM, in Victoria, New South Wales and South Australia.
Spot prices plunge
Regional electricity spot prices fell massively, between 21% and 68% compared to the first quarter of 2020, reaching their lowest average since 2015.
The largest spot price reductions occurred in Victoria, falling from $79/MWh to $25/MWh, its lowest quarterly average since the first quarter of 2012.
New South Wales declined from $86/MWh to average $38/MWh, while Queensland averaged of $43/MWh.
Continuing the trend of final quarter of 2020, negative spot prices remained confined to the southern regions, with Victoria reaching record quarterly occurrences at 10.3%, and South Australia remaining what the AEMO described as “very high” at 16.8%.
“South Australia’s average daytime prices fell below zero consistently between 10am and 3:30pm (AEST) during the quarter, the first time in the NEM’s history. At the same time, persistently low electricity prices below their cost of generation required AEMO to direct South Australian gas-powered generations on for system security for a record 700% of the quarter,” the AEMO’s Chief Markets Officer, Violette Mouchaileh, said.
In South Australia, the average spot price during peak solar production was negative $12/MWh.
Increased renewable energy output coupled with reduced daytime electricity demand saw average Balancing Prices reduced in Western Australia from $56/MWh in the first quarter of 2020 to $47/MWh this quarter – the reduction was despite increased evening peak demand and a hot summer.
The state set a new record for minimum operation demand in the South West Interconnected System (SWIS) on 14 March. Operational demand at this time dropped to 952 MW, 33 MW below the previous record, with estimated distributed PV output of 1,026 MW at the time.
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