Gas-fired electricity production in Australia has reached its lowest level in the third quarter since 2000. According to the "Quarterly Energy Dynamics" (QED) report published by the Australian Energy Market Operator (AEMO), this decline is due to record renewable energy production and increased large-scale battery capacity.
Increased Electricity Demand in Winter
Despite a decrease in heating needs, electricity demand in Australia during winter (July to September) has increased by 1.3%. This increase is attributed to ongoing electrification, higher industrial demand, and greater consumption from data centers. Violette Muchaile, AEMO's General Manager of Policy and Corporate Affairs, stated that "electricity usage continues to grow, but solar and storage are changing the timing of energy production and consumption from the grid."
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Record Renewable Energy Production
Renewable energy production in the third quarter has reached a record 44.3% of total generation in the National Electricity Market (NEM). Large-scale solar generation has increased by 30% and hydroelectric generation by 15% compared to last year. Additionally, large-scale battery capacity has more than tripled compared to last year, while gas-fired electricity production has decreased by 34%, reaching the lowest average for the third quarter since 2000.
For the first time in history, large-scale batteries have supplied 8% of peak night generation between 4 PM and 9 PM, surpassing gas-fired electricity production by 5.1%. According to AEMO, sample data shows that households using rooftop solar and batteries consume about three-quarters less from the grid during peak nights.
The increase in battery charging and discharging has led to a significant reduction in peak night prices, with batteries setting the price in nearly half of the pricing intervals, compared to 18% last year. Average wholesale electricity prices in the NEM, which contribute to retail prices, have decreased by 27% compared to last year and by 15% compared to the June quarter, reaching $63 per megawatt-hour (MWh), the lowest average for the September quarter since 2021.
While gas remains key to Australia's energy and electricity system, the increase in renewable energy production and large-scale battery capacity is changing Australia's energy mix to manage access to renewable energy.
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