SA wholesale power prices plunge, AEMO report shows
The price of generating electricity in South Australia has nearly halved in a year, according to official energy market data published on Thursday.
The wholesale spot price for SA fell to $40 per megawatt hour for the September quarter, the Australian Energy Market Operator said.
In the same quarter last year, the price was $75/MWh. In 2017, it was $98.
Prices dropped in all states.
“Mainland National Electricity Market wholesale electricity prices declined almost 50 per cent compared to the same period last year, reaching their lowest September quarter level since 2014,” AEMO managing director Audrey Zibelman said.
Key factors driving down prices included lower demand because of the economic downturn, improved reliability of coal-fired generators in NSW and Victoria and more wind and solar farms being opened.
“Grid-scale solar and wind accounted for 14 per cent of the generation mix, up from 12 per cent in Q3 2019 due to increased supply coming into the system,” Ms Zibelman said on the national market.
“Further, wind and solar output provided a record 35 per cent of total generation on September 27, 2020,”
Households will not see immediate benefits but forward contracts for supply have been trending down. SA recorded the largest drop in forward prices.
Falling wholesale electricity prices must be passed on to consumers, federal Energy and Emissions Reduction Minister Angus Taylor said.
“Our Big Stick legislation is dealing with misconduct in the electricity sector and ensuring retailers put customers first by passing on reductions in wholesale prices,” he said.
“There have been 13 straight months of wholesale price reductions on the previous year. We expect the energy companies to pass this on.”
Ms Zibelman spoke on Tuesday at the formation of a global alliance of energy system operators.
The Global Power System Transformation Consortium aims to share technological knowledge between Australia, the UK, Ireland, California, Texas and Denmark.
The consortium has a goal of unlocking $US10 trillion of private sector investment.
“Countries around the world are looking to pursue a path to modern, low-emissions energy systems, but face significant challenges in acquiring and applying the technical knowledge needed to operate and plan rapidly transforming power systems,” Ms Zibelman said.
AEMO’s quarterly report also recorded significant falls in the price of gas, due to lower demand and falling international prices.
The report made separate mention of the Hornsdale Power Reserve – the big battery at Jamestown owned by Neoen which uses Tesla batteries.
It found that since the battery was expanded from 100MW/129MWh to 150MW/193.5MWh it had increased its share of the market which keeps frequency stable from 10 per cent to 17 per cent.
In SA spot prices were negative 10 per cent of the time in the quarter, with solar farms paying to generate in September.