Large scale solar generation exceeds gas for first time, rooftop solar pushes peak demand to five year low

Electricity generated from large scale solar has, for the first time in Australia, exceeded the average amount generated by gas. Simultaneously, rooftop solar has meant traditional periods of peak grid demand during high summer are at the lowest levels in five years, shifting national consumption patterns and causing wholesale electricity prices to hit nine-year lows.

The arresting statistics come from the Australian Energy Regulator’s Wholesale Markets Quarterly report for the first quarter of this year, with the agency’s chair, Claire Savage, describing the report as underlining the effect of Australia’s energy transition.

Rooftop solar distinctly diminishes grid demand

Unlike much of the developed world, Australia’s peak energy draws come from cooling rather than heating, with millions of Australians turning on energy hungry air-conditioners in the middle of summer days to get relief from smouldering temperatures. With around 20% of Australian households now fitted with PV panels – up from 0.2% in 2007 – the National Electricity Market (NEM) is simply not experiencing the draw it would from this traditional behaviour with one in five Australians bypassing the grid altogether, powering their aircon with energy harvested on their roof.

The highest peak electricity demand this financial year occurred on Sunday 24 January, 2021 – the hottest summer’s day for much of the country’s east. The pressure placed on the grid that day was lower than each of previous five summers. Energy consultant and honorary ANU associate professor, Hugh Saddler, remarked this phenomenon was “undoubtedly caused of the growing supply from rooftop solar,” in his National Energy Emissions Audit for the Australia Institute.

Tellingly, rooftop solar is now generating more energy for the grid than coal plants. “Rooftop solar made a larger contribution to the grid during the 2020-21 peak demand than either Liddell (output 750MW) or Yallourn (output 1,300MW),” Saddler said in his Australia’s Institute report, in reference to two of Australia’s biggest coal-fired power stations.

Wholesale electricity prices plummet

The rise of solar in Australia has plunged wholesale electricity prices to depths not seen in almost a decade. “There were fewer prices above $300/MWh this quarter than in any other Q1 since 2012, and there were also near record numbers of negative prices in Victoria and South Australia,” the Australian Energy Regulator noted.

“As a result, black coal generation fell to its lowest ever Q1 level, and gas generation fell to its lowest Q1 level since 2005,” the Australian Energy Regulator’s report said, noting that both Victoria and NSW consumed less than 1 PJ of gas last quarter. In other words, gas-fired electricity hit its lowest level in 16 years, and was overtaken by solar.

Morrison government announces $600m for new gas plant

Nonetheless, the Morrison government last night pledged $600m of unallocated funding from last week’s budget to build the controversial 660 MW Kurri Kurri gas plant in the Hunter region of New South Wales.

The massive announcement, which left many staggered, comes just a day after the International Energy Agency (IEA) published its Net Zero by 2050: a Roadmap for the Global Energy Sector. In the report, the IEA say in no uncertain terms that to reach net zero by the middle of the century, there must be “from today, no investment in new fossil fuel supply projects, and no further final investment decisions for new unabated coal plants.”

Morrison must have missed that one.