A new report by the Australian Energy Market Operator (AEMO) revealed that Australia’s energy prices have dropped in the third quarter, despite international gas prices continuing to rise.
An increase in the availability of dispatchable generation helped drive power prices lower, together with increased renewable energy, particularly rooftop solar, and milder late winter weather.
The Australian Energy Market Operator’s latest Quarterly Energy Dynamics (QED) report for the third quarter of 2021 found wholesale electricity prices fell significantly across the east coast National Electricity Market (NEM) in the three months to the end of September, 2021.
The report found variable renewable generation grew strongly in the quarter, driven by higher wind and solar output and commissioning of new grid-scale generators.
New records were set for instances of renewable generation, with 61.4 per cent of electricity across the NEM from renewable sources at one point in September.
The Western Australian network also set new records for variable renewable generation, supplying 70 per cent of demand on one day in early September.
Federal Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said the QED report highlighted the need for dispatchable energy to support the growth in renewable energy and to ensure grid reliability and to keep prices low.
“Coal outages in New South Wales, coinciding with the incident at Callide in Queensland, drove up prices across the NEM in July,” Mr Taylor said.
“However, coal coming back online, falling gas prices, easing demand and increased rooftop PV generation during August and September put downward pressure on electricity prices, with September mainland NEM prices returning to average $37 per MWh.”
The QED report also covered recent volatility in global gas markets. AEMO noted that record international gas prices in the third quarter have had no discernible impact on the Australian market, with domestic energy prices moving in the opposite direction to international prices.
“Australia’s competitive advantage has always been based on cheap energy,” Mr Taylor said.
“This report demonstrates the importance of ensuring that there is enough gas in the market to supply times of high demand and to provide security for our manufacturing sector.”