In the final quarter of 2024, renewable energy sources accounted for a record 46% of Australia’s electricity supply, marking a historic shift in the country’s electrical infrastructure. A significant shift in the nation’s energy landscape was evident as coal-fired generation accounted for less than half of the overall supply for the first time.
Increased coal outages, high demand from severe weather, and rising wholesale electricity costs all occurred at the same time as the boom in renewable energy output. The nation’s shift to greener energy has seen both advancements and difficulties, according to the most recent data from the Australian Energy Market Operator (AEMO).
Renewable Energy Reaches Record Highs as Demand Intensifies
On November 6, renewable energy sources accounted for 75.6% of total generation in Australia’s National Electricity Market (NEM), with notable increases from wind and solar power. Both rooftop and grid-scale solar output hit all-time highs, rising 18% and 9%, respectively.
Due to historically low coal generating availability, the percentage of coal-fired power dropped below 50% for the first time, according to AEMO. In addition to black coal generation reaching its lowest level ever, brown coal-fired output fell 9.2% from the previous year.
Higher-than-average temperatures and heatwaves across Australia drove electricity consumption to its highest levels in a December quarter since 2016. Maximum demand peaked at 33,716 megawatts (MW) on 16 December, while average total demand was also the highest on record for the final quarter of a year.
Coal Outages and Transmission Challenges Drive Price Volatility
Despite the rise in renewables, wholesale electricity prices saw an 83% increase from the previous year, averaging $88 per megawatt-hour (MWh). This was, however, a 26% drop from the third quarter of 2024, when prices averaged $119/MWh.
AEMO attributed the year-on-year price rise to frequent coal outages, particularly affecting brown coal plants, as well as higher overnight demand and transmission bottlenecks. Several high-priced events occurred in New South Wales and Queensland, driven by intense demand spikes on certain days.
Energy Minister Chris Bowen highlighted the link between coal reliability issues and price volatility, stating: “The data confirms what we know – unreliable coal is having a negative impact on energy prices. More renewables in the system bring wholesale prices down, and new transmission infrastructure is critical to keeping prices lower.”
