Renewables Dominate Grid, Driving Prices Down as Coal Hits Record Low
The Australian Energy Market Operator (AEMO) announced a significant reduction in wholesale electricity prices for the December 2025 quarter. This period marked a historic milestone as renewables generated half of the country’s energy demands, with coal generation reaching record lows.
Significant Decrease in Electricity Prices
Wholesale electricity prices within the National Electricity Market (NEM) nearly halved, dropping to $50 per megawatt hour (MWh) compared to the previous year. This decline in prices can be attributed to a surge in renewable energy output and battery storage capabilities.
Key Data and Statistics
- Average wholesale prices: $50/MWh
- Battery discharge: Tripled
- Wind output: Increased by 29%
- Rooftop solar: Achieved record highs
- Coal output: Fell by 4.7% to a record low
- Gas generation: Decreased by 27%, reaching its lowest in 25 years
- Emissions: Dropped to 23.4 million tonnes of CO₂-e, down 6.2% year-over-year
- Emissions intensity: Recorded at 0.53 tCO₂-e/MWh, a 7% reduction
Renewable Energy Impact
The results showcase the benefits of investing in renewable energy sources. AEMO’s head of policy and corporate affairs, Violette Mouchaileh, stated that the advancements in wind, solar, and battery technologies have lessened reliance on more expensive coal and gas, thereby driving prices down.
Future Projections
Despite the positive results in the December quarter, challenges remain. The March quarter may present different outcomes due to January’s heatwaves that led to higher demand. Federal Energy Minister Chris Bowen emphasizes the government’s commitment to an 82% renewable energy target by 2030, celebrating the recent progress seen in the electric market.
State-by-State Insights
The average wholesale electricity prices varied substantially across states. States with a higher mix of renewable sources, like Victoria and South Australia, reported lower prices ($37/MWh). In contrast, states still heavily reliant on coal, such as New South Wales ($75/MWh) and Queensland ($58/MWh), faced higher costs.
Changing Dynamics of the Energy Grid
The December Quarterly Energy Dynamics report from AEMO highlights a rapidly evolving energy grid. Traditional energy sources like hydro, coal, and gas are progressively being replaced by wind, solar, and battery technologies. Notably, a new instantaneous renewable energy peak of 78.6% was recorded, along with a potential peak of 113.9% during the quarter.
Renewable Energy Peaks
- South Australia reached a peak of 98.7% renewable generation.
- New South Wales peaked at 86% renewable generation.
- Victoria hit 82.5%, while Queensland reached 70.6%.
- Western Australia’s isolated grid peaked at 91% from renewable sources.
These developments signify a positive trend towards a more sustainable energy future. As renewables continue to take precedence, the transition supports lower costs and reduced emissions across Australia. For ongoing updates about the clean energy sector, follow Filmogaz.com.
