Solar pushes average midday prices in Queensland to near zero

The growth of large scale and rooftop solar in Queensland, and the absence of storage in the market, pushed the average midday price of electricity in Queensland close to zero in the September quarter.

The Australian Energy market Operator, in its latest Quarterly Energy Dynamics report, says the price fall in Queensland over the past year has been dramatic, with the midday price falling from an average of more than $56.70MWh in the same period in 2018 to just $4.90/MWh in the latest three month period.

The fall in midday prices is part of a radical reshaping of both the demand and the pricing curve in Queensland, which also experienced a big increase in negative pricing events (also caused by significant transmission constraints that reduced exports to NSW).

South Australia – which has the highest share of wind and solar at more than 50 per cent of demand – also experienced a significant amount of negative pricing periods and record lows in “operational demand during the last quarter, as did Western Australia.

The situation in Queensland was likely exacerbated by the absence of grid scale battery storage in the state, and the decision by the coal-dominated CS Energy to leave the state’s biggest “battery”, the 570MW Wivenhoe pumped hydro project idle for much of the time.

AEMO noted that Wivenhoe had only been switched on for 18 per cent of the “negative pricing” prices, when it could have been paid to pump water uphill, ready for generation when the prices inevitably spiked higher to meet peak demand in the evenings.

But it didn’t, with AEMO citing a mix of environment, plant issues and “commercial considerations” for its inactivity.

That is likely to change now that Wivenhoe is owned and operated by the newly formed CleanCo, which has already made the facility more active in its first two weeks of management.

It still made for some interesting responses from the state’s coal generators. Many find it difficult to change their output dramatically, but this is what the Gladstone generator did in the last three months. Show people this graph when they claim solar does not displace coal.