Solar replaces wind as Australia’s biggest source of renewable energy

The combination of rooftop solar on 2.7m Australian homes and new large-scale solar projects saw the clean energy source account for 9 per cent of the nation’s electricity generation in 2020

The key issues in the Upper Hunter By-Election are coal and jobs. Pictured is the Liddell coal fired power station that is due to be closed next year. Steam from the nearby Bayswater Power Station can be seen coming from the cooling towers in the background. Picture: David Swift

Solar power has outstripped wind generation in Australia’s electricity market to become the biggest source of renewables supply in 2020, while coal continued to lose market share even as it remains the dominant fuel source for the grid.

The combination of rooftop solar on 2.7 million Australian homes and new large-scale solar projects saw the clean energy source account for 9 per cent of the nation’s electricity generation for the year to December 31, up from a 6.8 per cent in 2019.

Wind power rose to 8.5 per cent in 2020 from 7.4 per cent a year earlier, while hydro was steady at 5.5 per cent, figures released by the Department of Industry, Science, Energy and Resources show.

Renewables overall contributed nearly a quarter of system supplies at 24 per cent, up from 21 per cent in 2019.

“Solar is now the largest source of renewable energy at 9 per cent of total generation, up from 7 per cent in 2019, with one in four Australian homes having solar – the highest uptake in the world,” Energy Minister Angus Taylor said.

“The large uptake of solar helped contribute to the record 7 gigawatts of new renewable capacity installed last year, confirming Australia as a renewable energy world leader.”

Fossil fuels continued to do the bulk of the heavy lifting with coal and gas generating 73 per cent of grid needs.

While coal supplied 54 per cent of generation, it represented a continued decline from the 56 per cent share in 2019, reflecting the emergence of solar as a cheaper rival during daylight hours.

The relentless surge of cheap and plentiful renewables – solar, wind and hydro and battery storage – is sparking a shift among the big baseload coal producers that supply much of the grid’s needs and forcing some generators to reduce their load during the day.

Black coal-fired power stations fuelled 41 per cent of generation from 44 per cent a year ago with brown coal used in Victoria’s plants up slightly to 12.8 per cent. Gas remained steady with a 20 per cent market share with its use growing in Queensland and the Northern Territory.

The balancing role of “firm” generation sources including hydro, fast-start gas and batteries will be integral to backing up the renewables surge, according to Mr Taylor.

Up to 19GW of firmed dispatchable resources will be required in the next two decades to back up renewables in Australia, official forecasts show.