Australian First: Solar Eclipses Coal

6 minute read

For the first time, solar generation has outstripped coal in supplying Australia’s national electricity grid.

Sunday afternoon just gone might not have felt historic, but while you were out in the surf, watching the footy or kicking back in lockdown, a big moment in the Australian energy market slipped by almost unnoticed.

At 1.30pm (AEST) on Sunday afternoon, August 22, a number of things happened in the National Energy Market (NEM).

The NEM is the wholesale electricity market covering the five eastern states – Queensland, NSW, Victoria, Tasmania and South Australia – which are all connected, allowing electricity to be transmitted, bought and sold across them.

So, Sunday afternoon.

First up, it was a record low for demand on the NEM grid, full stop. With warm weather over most of the east coast – and most importantly sunshine – demand on the grid dropped to an all-time low. Demand on the grid has generally been in decline in recent years, driven largely by the uptake of rooftop solar across the country.

Following this, an all-time low was hit for coal generation on the grid. Coal generation bottomed out on Sunday afternoon at 9,365 megawatts. Again, this trend downward has been happening for over a decade now.

And a corollary to both of these? Sunday set a new renewable energy record. At 1.30pm the percentage of renewable generation in the NEM topped out at 56.2%, topping the previous record in April. This was made up predominately by solar generation.

"And the remarkable thing here? The renewables record could really have been smashed even further."

The end result of all of this? Negative electricity prices across all five states, the lowest being South Australia which had minus $464.25 per megawatt hour. Energy producers were paying to keep running. Coal generators were hit hardest, not being as nimble as wind or solar and unable to shut down on short notice. In terms of the states, South Australia and Victoria both nudged 100% renewable generation.

And the remarkable thing here? The renewables record could really have been smashed even further. Many wind generators chose to shut down due to the negative prices.

While the renewables record was only fleeting – total coal generation in the NEM over the whole week was 57% of the market, and the Daily Telegraph led with the headline, “Solar’s Moment in the Sun” – the bigger picture is that coal generation is in steep decline across Australia. Also nosediving is gas generation, which provided just 6% of the NEM’s power over the first half of 2021, its lowest on record. This makes a mockery of the idea for a new $600 million gas-fired power station in Kurri Kurri.

For energy nerds – or anyone curious about how all this works and what’s happening in the big picture – there’s a bunch of interesting sites to either monitor what’s happening, read some analysis, or simply learn how it all works.

Banner image and above: Graph illustrating NEM generation in megawatts from 1pm (AEST) on Sunday, August 22, 2021. Yellow indicates solar-powered generation, with black and brown showing coal-powered. Courtesy of opennem.org.au.