The Australian Energy Market Operator (AEMO) has described the June quarter as an unparalleled period for the nation’s energy markets, with wholesale electricity and gas prices tripling in the National Electricity Market (NEM) compared with a year ago with outages at coal-fired power plants and soaring global fossil fuel costs combining to create “unprecedented” market disruptions.
The latest AEMO’s Quarterly Energy Dynamics (QED) report shows wholesale electricity spot prices averaged $264 per MWh in the NEM for Q2 2022, up by $177/MWh on the previous quarter and more than three times on Q2 2021’s $85/MWh average.
Wholesale gas prices averaged $28.40 per gigajoule (GJ) in east coast markets, compared to $8.20/GJ the same time 12 months ago, and almost triple the previous record of $10.74/GJ set in the September quarter last year.
The skyrocketing prices triggered the application of administered price caps, first in the gas markets and then in the NEM, and the first suspension of trading in Australia’s main grid since its creation in 1998.
AEMO executive Violette Mouchaileh said the three months to June had been one of the most “complex and challenging periods” in the market’s history and underscored the need to accelerate the transition to renewable energy generation, storage, transmission, and system services.
Mouchaileh blamed the soaring prices on “multiple factors”, including high global prices for fossil fuels, outages at coal-fired power plants, supply issues, and the coldest start to winter “in decades”.
“These factors also drove the frequency of NEM spot prices exceeding $100/MWh from 14% in Q2 2021 to 86% in Q2 2022, and above $300/MWh from 1% to 26%,” she said.
“What’s clear is the urgent need to build-out renewable energy with diversified firming generation, like batteries, hydro and gas, and transmission investment to provide homes and businesses with low-cost, reliable energy.”
AEMO said coal-fired generation outages reached highs of about 3.6 GW in late April and peaked in June at 4.6 GW.
Those outages, bidding changes and fuel supply constraints saw black coal generation’s average quarterly output down by 947 MW or 8.5% from Q2 2021 to its lowest Q2 output on record, its share of NEM supply falling 4.8 percentage points to 43%. Output from brown coal plants also continued to shrink, dropping 0.9 percentage points to make up 15.6% of supply while gas-fired generation overtook coal as the primary fuel towards the end of the quarter, rising 27% to 472 MW from Q2 2021 to its highest Q2 level since 2017.
Renewable energy continued to expand its share of the market. Output from grid-scale solar and wind increased 21%, or 664 MW, from a year earlier, driven by new capacity additions and commissioning.
Rooftop solar continued to grow with total installed capacity in the June quarter reaching 2,174 MW, 22% higher than the same period last year.
Overall renewable supply share for the quarter was 31.8%, up 3.7% on the same time last year.
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This seems a very one eyed article. Germany pushed hard for renewables yet is firing back up coal powered base load power stations due to gas restrictions by Russia. Meanwhile France is net exporter of electricity generated by reliable nuclear base load power generation and have done for years. We in Australia have exported so much uranium ore yet we dont entertai the idea ouselves. It seems quite hypocritical, to me at least. Batteries, big or small, have a finite life, some much shorter than others and can also be difficult and expensive to dispose of.
Solar panel life is very finite and seems to be getting shorter, also difficult to recycle.
Why are we not exploring tidal flow power generation , which is predictable 99 years in advance, work in the dark or when the wind is not blowing and components are easily recyclable at end of life.
Harmonic distortion created by dc to ac conversion creates problems in the local bus( grid) and can damage new energy efficient dc appliances. Some of these issues are not even picked up by electricians/ technicians and often only occur for short periods / intermittantly.
Power factor change and correction is part of this , which when asked of 2 electrical engineers, can get 2 different answers, both correct but both leaving a lot unanswered.
Hi Iain, thanks for your comment! You raise an interesting point about tidal energy – which is something I too find interesting. We’ve previously covered some of the potential and problems with those projects (https://www.pv-magazine-australia.com/2022/03/01/novel-australian-project-examines-if-renewable-energy-machines-can-be-used-to-protect-coastlines/).
I think the issue with nuclear (aside from the safety risk factor of course) is that it takes a really long time to build those plants, so Australia has kind of missed the boat there. That’s fine for France because their stations are already up and running, but it would take perhaps a decade before anything gets off the ground here and the energy transition is already upon us and moving at an incredible pace.
As for solar panels, I don’t think it’s quite fair to say their lives are getting shorter – at least not at the top end. Maxeon/SunPower recently boosted their warranties to 30 years and there is a lot of work being done around recycling in Australia and worldwide – which hadn’t previously been done, primarily because there wasn’t enough solar panels reaching the end of their lives to warrant recycling businesses. As for the different answers from different electricians & engineers – that certainly abounds. A lot of the changes being faced today are entirely new, so I guess that’s par for the course!
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