Electricity emissions and prices plummet
Australia’s electricity emissions dropped to their lowest level on record in the June quarter.
Australia’s electricity emissions dropped to their lowest level on record in the June quarter, due to less coal output, while wholesale prices were at their cheapest since 2015 as a steep fall in the cost of gas flowed through to the power grid.
Emissions in the national electricity market declined to their lowest mark on record at 32.5 million tonnes of carbon dioxide equivalent in the June quarter as black coal-fired generation slumped to its lowest second-quarter level since 2014, along with softer demand and higher renewables, the Australian Energy Market Operator said.
Black coal output fell by a huge 1148 megawatts from a year earlier. The nation’s largest coal facility, Origin Energy’s Eraring plant, recorded its lowest second-quarter generation since 2013 as it was undercut by solar, wind and brown coal-fired supplies. That meant it was operating more frequently at close to minimum generation levels of only 180MW, less than 10 per cent of capacity, due to low spot prices.
Electricity demand only fell by 2 per cent in the June quarter despite COVID-19 ructions. Large reductions in commercial demand of 10-20 per cent were offset by a jump in residential use, with industrial demand largely flat.
Commercial services account for 28 per cent of demand, with consumers at 24 per cent and manufacturing at 22 per cent.
“Operational demand reduced by an average of 429MW across the national electricity market, with the largest reductions being observed in Queensland and NSW due to these regions experiencing the biggest uptake of rooftop solar and largest COVID-19-induced demand reductions,” AEMO chief executive Audrey Zibelman said.
Wholesale electricity prices fell to their cheapest levels since 2015, driven by lower gas and coal prices, higher hydropower output, tepid demand and new renewable supplies, AEMO said.
Prices in the national electricity market fell by 48-68 per cent on the prior year, with wholesale gas prices averaging $4.10 a gigajoule, the lowest since late 2015.
Negative spot prices reached the highest quarterly level on record as the trend most widely seen in Queensland and South Australia crept into the broader power market.
“In Victoria negative spot prices occurred 3.9 per cent of the time, which was a new quarterly record. The high degree of price alignment between Victoria and South Australia meant that 92 per cent of negative prices in Victoria occurred at the same time as negative prices in South Australia,” AEMO noted.
Grid-scale solar and wind generation accounted for 13 per cent of the generation mix, up from 10 per cent in the same period of 2019, with hydro edging up to 9 per cent, from 8 per cent.
National electricity market system costs returned to typical quarterly levels of about $60m compared to $310m last quarter “following record levels due to major power system separation events relating to severe weather and bushfires”, Ms Zibelman said.
Energy Minister Angus Taylor credited the introduction of the controversial “big stick” legislation for helping reduce prices for consumers.