Renewables Surge, But Vulnerabilities Remain, Sparking Debate Ahead of Federal Election

Renewables Surge, But Vulnerabilities Remain in Australia's Energy Grid

Australia's energy market is seeing a surge in renewables, with record-breaking contributions. However, vulnerabilities remain, as highlighted by the latest quarterly report from the energy market operator.

Renewables provided three-quarters of the power in the grid for a half-hour period on November 6, 2024, driven by a 18% increase in rooftop solar and a 9% increase in grid-scale solar. This surge pushed wholesale prices down, even leading to negative prices at times.

Despite the renewable boom, wholesale prices were up 88% in the last quarter of 2024 compared to the same period in 2023. This increase is attributed to warmer weather and planned outages in coal-fired power plants, highlighting the grid's vulnerabilities during the transition.

Record low outputs from coal generators pushed up prices and contributed to major spikes in November and December. One such spike occurred on November 27, leading to warnings about grid pressure and calls for reduced energy consumption.

Demand for power reached new highs due to warm temperatures and appliance electrification, while solar power pushed demand to record lows at other times. For the first time, coal made up less than half of the power consumed, with renewables accounting for 46%.

The need for new transmission projects to move power around the country is emphasized by the significant price variability between northern and southern states.

The future of the energy grid is a major election issue, with Labor and the Coalition presenting contrasting views. Labor supports renewables and transmission infrastructure, while the Coalition advocates for nuclear power and criticizes Labor's policies.

The debate over the best path forward for Australia's energy grid is likely to continue as the country seeks to balance affordability, reliability, and sustainability.