Wholesale prices in Queensland are believed to have set two new records in the past week – falling to and below zero for six days in a row, and hitting negative prices for five days in a row as the string of good weather, mild temperatures, strong solar output and moderate demand continued.
Queensland is not the only one to experience such shifts in prices. According to Marija Petkovic, the head of Energy Synapse, South Australia has also reached its 10th consecutive day when prices went negative at some stage. Again, this is the result of strong renewables output, and moderate demand.
The sequence of events follows several occasions this week when wholesale electricity prices across the four mainland states in the National Electricity Market went to zero (or below) at the same time. It occurred twice on Tuesday, and again on Wednesday, And maybe more.
It’s all the result of a lot of renewables output and relatively low demand, thanks to the mild temperatures in most areas. Negative prices will send a signal to the market for more storage – be it battery or pumped hydro – and for new technology such as the AI-based bidding strategies being rolled out by a firm backed by Arnold Schwarzenegger that is helping wind and solar farms manager those events.
In Queensland, the negative prices are being driven by the abundance of solar – both from rooftop installations on homes and businesses, and the growing number of grid-scale installations. Sometimes they happen because of grid constraints, or because coal generators decide to raise output and don’t want to dial down, so they lump a short period of negative prices.
In South Australia, where the share of wind and solar is already more than 50 per cent over the year, and where the state Liberal government has a 2030 target of “net 100 per cent” renewables, the negative prices can happen in both the day time and night time.
Still, South Australia has some way to go before establishing a new record on negative pricing. According to Petkovic, the record number of consecutive days when prices went negative at some stage was 14, in 2016.
Over the last seven days, wind and solar has accounted for 64.5 per cent of local consumption, but in Queensland it has accounted for less than 15 per cent.