Solar squeezes out coal to set new record low for demand on national grid

Australia’s world-leading rooftop solar uptake has delivered some more records for the National Electricity Market, including a new winter minimum operational demand low of 14,159 megawatts, recorded last week.

The Australian Energy Market Operator says the new low for consumer demand in winter was notched up in the middle of a relatively mild Sunday on August 28, and was 34MW lower than the previous winter record, set the week before on August 22.

At the same time as the new NEM record was set on the weekend, AEMO says grid-scale and rooftop solar were providing around 50% of generation, wind was at 8% of the mix and coal at 42%.

AEMO says new record lows for winter operational demand were also notched up on the same day (August 28) in South Australia at 359MW (previous 453MW on 14 August 2021) and in Victoria at 2,951MW (previous, 3,003MW on 22 August 2022).

The significance of this, of course, is that the more rooftop solar production, the less demand for fossil fuels, and it is the coal fleet in particular that gets crunched.

“Clearly there is a fundamental shift in fuel mix occurring in the NEM,” said Mike Davidson, AEMO’s manager of operational forecasting.

“Almost 3,000MW of rooftop solar was installed across the NEM in 2021, which outshone the previous high of 2,532 in 2020.”

Davidson’s statement also said AEMO says the first time coal was beaten by coal was in September 1 last year, and the first time in winter on August 19 this year.

As RenewEconomy wrote here last week, there have actually been instances in August last year when solar beat coal, firstly at 1240pm on August 22, 2021. Davidson doesn’t dispute this, but the difference is that AEMO uses 30 minute data, while RenewEconomy’s source, NEMLog2, is based on the 5-minute trading data.

What is clear is that solar is now beating coal earlier in winter and by ever increasing margins, as more and more panels go onto rooftops and as Australia’s remaining available coal capacity is declining and becoming less reliable.

AEMO’s Quarterly Energy Dynamics report for the June 2022 quarter found black coal-fired generation at its lowest second-quarter output since the NEM commenced in 1998, driven by outages, bidding changes and fuel supply constraints.

While its share of the NEM supply fell to 43% in Q2 2022, grid-scale renewable generation supply reached 31.8%.