Renewables provided just over 49 per cent of electricity demand in Australia’s main grid in January, despite a series of sweltering heatwaves that swept across the country, while the huge growth in battery storage also saw prices actually falling from the same period a year ago.
According to data providers Open Electricity, renewables contributed 49.1 per cent of all demand in January, up from 44 per cent a year earlier and 39 per cent in January 2023, and despite higher overall demand driven by soaring temperatures in the summer holiday month.
And, as seen in December quarter when renewables accounted for an average of more than 50 per cent of supply for the first time and were responsible for a steep fall in wholesale electricity prices, the average price this January was also down in the critical evening peaks, thanks mainly to the huge growth in battery storage.
David Leitch, ITK principal and co-host of Renew Economy’s weekly Energy Insiders podcast, notes in these graphs that follow that – apart from an extraordinary surge in South Australia on January 26, prices in the evening peaks were on general significantly lower than the previous January.
The next graph goes into more detail or what was happening during those evening peaks across the month – less coal, less gas generation, more wind, and a lot more battery storage.
Not only are the running costs of renewables and storage lower than fossil fuels, the addition of more wind, solar and battery in the mix has another important impact – reducing competition, although the events in South Australia on January 26 shows there is still work to be done on that front.
But there is a huge pipeline of new capacity, particularly in battery storage, which AEMO has noted had already grown three-fold in the last 12 months.
Leitch says that in each state – with the exception of Queensland – the capacity of battery storage working its way through construction and commissioning is significantly higher than current capacity. And even in Queensland that still means a doubling of existing capacity (see graph below).
Legacy generation companies are contracting a lot of that capacity, but not all. And the growth in battery storage contracted to big energy users, and playing in the open market, will likely exert more downward pressure on the evening peaks which will be so essential if these benefits are to flow to households and small business.
See Renew Economy’s Big Battery Storage Map of Australia for more information.
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