The Australian Energy Market Operator (AEMO) has unveiled its latest Quarterly Energy Dynamics report, which shows renewable capacity skyrocketing in the National Electricity Market (NEM) as coal availability declines.
The report found ongoing investment in new projects is contributing to steady growth in renewable generation, which, combined with reduced coal availability, has broken further renewable records in the NEM.
During the March quarter 2025 (Q1 2025), grid-scale solar generation grew ten per cent and battery output surged 86 per cent to reach all-time highs, while Q1 records were achieved for rooftop solar output, which grew 16 per cent, and wind generation, which rose 18 per cent.
AEMO Executive General Manager Policy and Corporate Affairs, Violette Mouchaileh, said that growing renewable and battery capacity in the NEM is driving increasing contributions, while, at the same time, black and brown coal-fired generator availability has declined to fresh Q1 lows.
More broadly, NEM-wide underlying demand reached 25,162MW, which was a new Q1 record. However, operational demand dipped 0.8 per cent as milder weather conditions in New South Wales and Queensland offset demand growth in southern mainland regions, where it was warmer.
Although temperatures were generally lower in Queensland, it was the only state to reach a new peak demand record of 11,144MW on 22 January 2025.
Minimum operational demand records also occurred during Q1, with all-time new lows in Victoria (1,504MW) and New South Wales (2,718MW).
“These minimum demand records were largely attributable to growth in rooftop solar, with the NEM, as a whole, reaching a new Q1 record of 11,680MW,” Ms Mouchaileh said.
“The impact of the transitioning electricity system was also seen, with a 5.1 per cent decline in total emissions, due to the combination of lower coal- and gas-fired generation and higher renewable output.”
A 67 per cent increase in Tasmanian wholesale prices pushed average NEM-wide wholesale electricity prices up to $83/MWh in Q1; however, mainland regions dipped from $78/MWh to $76/MWh.
Prices set by coal generators rose to $84/MWh, while hydro generators were also up to $123/MWh. Grid-scale solar and wind set prices in 15 per cent of intervals in Q1 2025 compared to ten per cent during the same period in 2024.
“Upward forces in coal and hydro prices were largely offset by downward pressures from higher renewable energy availability and fewer extreme price volatility events this quarter,” Ms Mouchaileh said.
“Additionally, the frequency of negative pricing increased during the quarter, particularly in the NEM’s northern regions, which was largely attributable to grid-scale solar and wind setting prices more often.”
In the east coast gas market, wholesale gas prices rose from $11.60/GJ in Q1 2024 to a new Q1 record of $13.26/GJ. On average, demand decreased two per cent compared to Q1 2024, which was largely due to a small drop in Queensland LNG exports (-3PJ), combined with reduced supply to gas-fired generation (-2PJ) and an overall 1PJ dip in the broader east coast market demand.
Ms Mouchaileh said Western Australia’s Wholesale Electricity Market (WEM) experienced similar trends to the NEM with record renewable and battery contributions.
Renewable contributions averaged 41.6 per cent, which was a new Q1 high. Alongside this, output from coal-fired generators fell 4.6 per cent – largely attributed to the semi-retirement of Muja C Unit 6.
Underpinning the Q1 renewable contributions was a 261 per cent increase in battery generation to comprise 1.3 per cent of the fuel mix, and introduction of hybrid Cunderdin battery and solar facility, which accounted for 0.8 per cent of the mix.
Rooftop solar generation continued to grow, with its share of the mix expanding to 20.5 per cent.
“The higher renewable and battery generation combined with lower coal-fired power output resulted in a Q1 record low in emissions intensity, which was 5.7 per cent below the same period last year,” Ms Mouchaileh said.
“This reflects the impacts of the transition underway within Western Australia’s main power grid.”
The lower emissions intensity was achieved despite elevated overnight temperatures and increased battery withdrawals driving record average underlying demand, and a new all-time demand peak of 4,486MW on 20 January 2025.
Elevated overnight energy prices and higher prices in the middle of the day were slightly offset by decreases during the evening peak.
The average energy price for the WEM rose $10.54/MWh to $89.03/MWh.
In Western Australia’s gas space, domestic consumption was almost six per cent lower at 91.7PJ than Q1 2024. Conversely, production was up marginally by 1.1 per cent to 101.4PJ for the quarter.
