Coal-generated electricity at lowest levels since 1998

The average annual output from wind and grid solar increased by around 600 megawatts in 2019-20. Picture: Sitthixay Ditthavong
The average annual output from wind and grid solar increased by around 600 megawatts in 2019-20. Picture: Sitthixay Ditthavong

Coal-generated electricity is at its lowest levels since 1998, as wind and solar generation reaches record levels.

Wholesale electricity prices fell to their lowest levels in five years between April and June, the latest quarterly report from the Australian Energy Regulator showed. Gas prices fell to their lowest levels in four years.

The regulator said the low wholesale electricity prices were due to a 40 to 50 per cent decline in the cost of fuels - like black and brown coal or gas and hydro - since the same time last year. Gas input prices in particular fell dramatically over 2019-20, amid a global supply glut and COVID-19.

Conditions were also milder than usual, despite the extreme bushfire seasons. As a result average demand fell in the first quarter of 2020 by 1000 megawatts.

COVID-19 also appeared to have an impact in the second quarter of 2020, due to falling demand for power from commercial and industrial operators. In South Australia, demand dipped below the previous minimum recorded during April and June eight times.

However, also driving the fall in demand was a record level of rooftop solar installation.

Almost 2000 megawatts of rooftop solar was installed across the National Energy Market in 2019-20 - 25 per cent more than was installed during the previous year, and double the amount installed the year before that.

Around one in five households across the National Energy Market partly meet their electricity needs through rooftop solar.

There was a record output for large-scale solar and wind generation too.

Wind and large-scale solar now makes up 13 per cent of the generation mix, compared to 6 per cent three years ago.

Meanwhile, coal generation fell to its lowest levels since the National Energy Market was created in 1998.

Coal-fired power fell from around 77 per cent of electricity generated to 71 per cent.

And while the average annual output from wind and grid solar increased by around 600 megawatts in 2019-20, average coal generation fell by more than 1000 megawatts.

Coal generation is expected to fall further as rooftop solar continues to lower demand for power from the National Electricity Market, and cheaper renewables puts downward pressure on prices.

Australian Energy Regulator chair Claire Savage said falling wholesale costs would likely flow through to customers over the coming years.

"Wholesale gas and electricity costs make up about a third of an average residential energy bill, so falling wholesale costs should mean good news for consumers," Ms Savage said.

"It can take time for gas and electricity wholesale price drops to flow through to household bills because many retailers have bought a lot of their wholesale energy a year or two in advance when wholesale prices were higher than they are now."

The report comes as the Morrison government considers underwriting new gas pipelines as part of a "gas-fired" recovery for Australia.

Energy Minister Angus Taylor said affordable gas was required to drive jobs and economic growth as Australia emerged from the coronavirus crisis.

However, medical experts have urged the Morrison government to steer clear of fossil fuels like gas, and instead turn to renewables as part of its COVID-19 recover.

But Mr Taylor said gas also had an important role to play in providing grid reliability and in reducing emissions.

"It is complementary to renewables, not a competitor," Mr Taylor said.

This story Coal-generated electricity at lowest levels since 1998 first appeared on The Canberra Times.

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