AEMO’s latest Quarterly Energy Dynamics report has found there was less volatile market conditions, improved generation availability and higher renewable output put downward pressure on wholesale electricity prices in the June quarter.
The report found solar output in particular helped drive prices down, wholesale electricity prices fell 59 per cent in the quarter compared to the same time last year, while solar output surged 30 per cent.
AEMO’s Quarterly Energy Dynamics report shows wholesale electricity prices in the NEM averaged $108 per megawatt hour (MWh), 59 per cent lower than record high quarterly price last year ($264/MWh), but 31% higher than the March quarter.
AEMO Executive General Manager Reform Delivery, Violette Mouchaileh, said increased market share of lower marginal-cost renewables helped push down the wholesale electricity cost, despite this quarter having the highest Q2 underlying demand recorded since 2016.
“In addition to increased wind and grid-scale solar output, lower thermal-coal costs and a net increase in black-coal generation availability in NSW – despite the retirement of the Liddell Power Station – helped reduce year-on-year wholesale prices.
By market share, rooftop solar (1.8%), wind (1.6%) and grid-scale solar (1.4%) generation increased compared to last year, while gas (-3.2%), hydro (-1.2%) and black coal (-0.6%) decreased.
NEM total emissions declined this quarter to the lowest Q2 levels on record at 28.7 million tonnes of carbon dioxide, 6.6 per cent lower than the same time last year, while emissions intensity dropped 4.3 per cent to 0.61 tCO2 e/MWh.
In Western Australia’s Wholesale Electricity Market (WEM), an all-time record high weighted average Balancing Price ($113/MWh) was set in the quarter, along with a new Q2 maximum operational demand record (3,652 MW).
“The WEM experienced price increases due to a reduction in energy availability, mostly coal-fired and wind generation, and high demand due to cold temperatures during the quarter,” Ms Mouchaileh said.
“Specifically in June, AEMO forecast multiple lack of reserve conditions due to forced outages of scheduled generators and low wind conditions, resulting in only two-thirds of the total installed generation capacity being available for dispatch,” she said.
