A surge of renewable energy sources into Australia’s primary power network has led to reduced emissions while also mitigating upward pricing pressures from costly coal, hydropower, and natural 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.
Massive battery generation hit a peak, seeing an increase of 86% in output averaging out to 98 MW over all hours.
During the summer period, wholesale prices were elevated in the southern regions and reduced in the northern areas as indicated by data provided by both the Australian Energy Market Operator (AEMO) and the Australian Energy Regulator.
AEMO's analysis revealed that the dry conditions affecting Tasmania's hydropower significantly contributed to a nine percent rise in wholesale electricity prices compared to the corresponding period in 2024, with averages reaching $83/MWh.
However, the average for the mainland regions decreased from $78 per megawatt-hour to $76 per megawatt-hour.
In comparison to the final quarter of 2024, the average wholesale prices dropped by six percent.
The upward pressure on coal and hydro prices was mostly counterbalanced by downward pressures due to increased availability of renewable energy sources and a reduction in episodes of significant price fluctuations, according to Violette Mouchaileh, the executive general manager of policy and corporate affairs at AEMO.
"In addition, negative pricing occurred more frequently throughout the quarter, especially in the northern areas of the National Electricity Market. This increase can mostly be attributed to grid-scale solar and wind facilities setting prices more regularly," she stated.
Electricity costs often drop significantly or even turn negative during windy periods with ample sunlight, enabling both solar panels and wind turbines to produce power efficiently.
Price surges happen during periods of exceptionally high demand or when cheaper power sources aren’t accessible, forcing dispatchable coal, gas, hydro, and battery systems to step in at elevated rates.
According to AEMO, the reduction of coal in the energy supply alongside an increase from solar and wind sources led to greenhouse gas emissions reaching their lowest levels for the first quarter ever recorded.
The total emissions dropped by 5.1 percent compared to the corresponding 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 regular update on the state of the energy sector comes after a clear win for federal Labor in the elections, which is expected to support the shift towards renewable sources and the phasing out of coal-powered plants.
The opposing party suggested a nuclear route towards an energy supply devoid of climate-changing emissions, but with a potential second term for the Albanese government, the consideration of this alternate technology may be closed off for the time being.
The East Coast downstream natural gas market saw spot prices drop by 2.8 percent compared to the prior quarter, settling at $13.17 per gigajoule, yet this was still 13.7 percent above what it was during the corresponding period of 2024.
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