Australia

Australia

Renewables growth to pressure prices

AUSTRALIA: A strong growth in renewables generation across Australia's national electricity market (NEM) should put pressure on the country's electricity prices, according to a new report by The Australia Institute (TAI) thinktank.

TAI's volume weighted average electricity spot prices on Australia's NEM suggests prices will fall
TAI's volume weighted average electricity spot prices on Australia's NEM suggests prices will fall

In its latest National Energy Emissions Audit, TAI said wholesale prices had declined in most states that are part of the NEM.

It added its view that wholesale prices in the NEM had peaked and "are now expected to gradually decrease".

"Quarterly volume weighted average spot prices, as calculated by the Australian Energy Regulator, have been lower in each of the five NEM regions (states) in both the June and September quarters this year than in the corresponding quarters in 2017, indicating that the market is now recovering from the shock induced by the sudden closure of Hazelwood power station.

"The strong growth of new renewable generation should continue to put downward pressure on prices," TAI said in its report.

TAI added Australia could see almost 8GW of installed wind capacity by 2021, up from the 5GW installed today.

It currently has no plans for a renewable energy support framework beyond 2020 when the current Renewable Energy Target system expires.

Australia’s energy minister Angus Taylor — brought in after Scott Morrison usurped former prime minister Malcolm Turnbull in late August following an energy debacle — has previously attacked renewables’ role on the Australian grid claiming it reduces security and increases prices.

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