An influx of renewables into Australia’s main energy grid has driven down emissions while helping counter price pressure from expensive coal, hydro and gas.
Solar and wind chipped in 43 per cent of the main grid’s supply in the first three months of 2025, up from 39 per cent over same period in 2024, while coal availability slipped to new first-quarter lows.
Large-scale battery generation reached an all-time high, with output jumping 86 per cent to 98MW when averaged across all hours.
Wholesale prices were higher in the southern states and lower in the north during the summer months, electricity system updates showed from both the Australian Energy Market Operator (AEMO) and Australian Energy Regulator.
AEMO’s report found dry conditions impacting Tasmanian hydro were largely responsible for the nine per cent increase in overall wholesale electricity prices compared to the same period in 2024, averaging $83/MWh.
Yet mainland region averages slipped from $78/MWh to $76/MWh.
Compared to the last three months of 2024, average wholesale prices were six per cent lower.
Upward forces in coal and hydro prices were largely offset by downward pressures from higher renewable energy availability and fewer periods of extreme price volatility, AEMO executive general manager of policy and corporate affairs Violette Mouchaileh said.
“Additionally, the frequency of negative pricing increased during the quarter, particularly in the NEM’s (National Electricity Market) northern regions, which was largely attributable to grid-scale solar and wind setting prices more often,” she said.
Electricity prices tend to be very low or negative when the wind is blowing and sun is shining, allowing solar panels and turbines to generate.
Price spikes occur during unusually high demand or when lower-priced generation is not available, leaving dispatchable coal, gas hydro and batteries to fill the gap at higher levels.
AEMO said less coal in the energy mix and more from solar and wind drove greenhouse gas emissions to new first-quarter lows.
Total emissions dived 5.1 per cent compared to the same quarter in 2024.
The ongoing growth of rooftop solar continued to take pressure off the grid despite underlying demand breaking new first-quarter records as Victorians and South Australians fired up their air conditioners on hot days.
The quarterly snapshot of the energy system follows a convincing federal Labor victory at the polls that should continue the transition to renewables and the retirement of coal generators.
The opposition posited a nuclear pathway to an energy grid free from climate-warming emissions, yet a second term for the Albanese government should shut the door on the alternative technology for now.
East coast downstream gas market spot prices sunk by 2.8 per cent from the previous quarter, to $13.17 per GJ, but were 13.7 per cent higher than the same time in 2024.
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