The rapidly changing dynamics of Australia's grid | RenewEconomy

The rapidly changing dynamics of Australia’s grid

South Australia becomes net electricity exporter for first time, 12 new wind and solar farms were added, the amount of large-scale solar tripled, and rooftop PV kept a lid on demand.


The politics may not change much, but Australia’s electricity grid is changing before our very eyes – slowly and inevitably becoming more renewable, more decentralised, and challenging the pre-conceptions of many in the industry.

The latest National Emissions Audit from The Australia Institute, which includes an update on key electricity trends in the National Electricity Market, notes some interesting developments over the last three months.

+ Renewables-rich South Australia became a net electricity exporter for first time;

+ 12 new wind and solar farms totalling 1050MW of capacity were added to the grid, including 500MW of large-scale solar, trebling the amount of large-scale solar in the system;

+ The continued rapid uptake of rooftop PV by homes and businesses kept a lid on grid demand, even if overall consumption showed a rise, and;

+ Electricity generation emissions in the NEM fell again, but only slightly.

The most surprising of those developments may be the South Australia achievement, which shows that since the closure of the Hazelwood brown coal generator in March 2017, South Australia has become a net exporter of electricity, in net annualised terms.

Lead author Hugh Saddler notes that this is a big change for South Australia, which in 1999 and 2000, when it had only gas and local coal, used to import 30 per cent of its electricity demand.

The fact that wholesale prices in South Australia were higher in other states – then, as they are now – has nothing to with wind and solar, but the fact that it has no low-cost conventional source and a peaky demand profile (then and now).

“The difference today is that the state is now taking advantage of its abundant resources of wind and solar radiation, and the new technologies which have made them the lowest cost sources of new generation, to supply much of its electricity requirements,” Saddler writes.

He notes that way back in the 1950s, when the local supply problem was first recognised, the then Electricity Trust of South Australia undertook a study into the feasibility of wind generation, about half a century before it was actually built.

Other things to note about the flows between states is that Victoria was about equal on imports and exports with its three neighbouring states, despite the closure of Hazelwood, while NSW continues to import around 10 per cent of its needs from Queensland.

This has nothing to do with the lack of supply in NSW. Its coal generators continued to deliver only around two-thirds of the time, it’s just that NSW plants are older and more expensive than the ones in Queensland.

Another interesting point is that gas-fired generation has increased in the last year or two in South Australia as a result of the Northern closure, but is still below the levels of a decade ago.

But because it is expensive, this is likely to spur more investment in storage.

As for rooftop solar, Saddler notes that the share of residential solar in the grid is still relatively small but it is the most steadily growing generation source in the NEM. (See red line in chart below).

That line is expected to grow steadily. By 2040, or perhaps 2050, the share of distributed generation, which includes rooftop solar, battery storage and demand management, is expected to reach nearly half of all Australia’s grid demand.

Saddler, says, however, that the increase in large-scale solar over the last few months is a significant milestone in Australia’s transition towards clean electricity generation. (See very top graph).

“Firstly, they are a concrete demonstration that the construction cost advantage, which wind enjoyed over solar until a year or two ago, is gone.

“From now on we can expect new capacity to be a mix of both technologies. Indeed, the Clean Energy Regulator states that it expects solar to account for half of all (new renewable) capacity by 2020.”

As for the change in emissions, this graph above tells the story, the brown line is key – there was another slight fall in the latest period.

But Australia – thanks to the closure of coal-fired generators and their replacement with wind and solar – has cut emissions by 18 per cent from the electricity grid in a decade.

Sadly, the government target is just a 26 per cent reduction from 2005 levels by 2030. Most of the rest of the target will be met over the next two years when the build-out of more wind and solar to meet the renewable energy target is completed.

Then what?

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  1. john 2 years ago

    “which have made them the lowest course sources of new generation”
    Should read
    “which have made them the lowest sources of new generation”
    In fact RE is proving to be the lowest sources of generation.

    • Ren Stimpy 2 years ago

      A source is a source, of course, of course.

      • Hettie 2 years ago


  2. john 2 years ago

    As to how Australia will move i think look at AGL who are going to replace the present Coal Clunker with RE and yes some Gas, however I think every FF Generator will move to this kind of system where they build RE be it wind solar or wind with storage or solar with storage or Concentrated Solar with Storage or Wind or Solar with PHES this how the generators will move.

    • Steven Gannon 2 years ago

      Businessess and citizens are the main drivers of the transition now. It was always going to turn out that way imo.

      • GregS 2 years ago


    • Shilo 2 years ago

      Why would they need gas it’s almost as dirty as coal and according to everyone it’s not as cheap as RE

    • Hettie 2 years ago

      Failure to move from fossil fuels extraction to renewables is business suicide. Happens all the time, but this will be bigger than any thing seen before.

  3. Chris Drongers 2 years ago

    The implications of the shift to renewables generation, full electrification of houses and many businesses, shift to low-part count electric vehicles, removal of drivers from cars and trucks, decrease in number of cars/houses/hotels/shopfronts as the sharing economy increases fractional use ratio of capital assets and the preference of an increasing part of the population to smaller footprint inner urban living are horrendous.
    Unemployment on a mass scale, binning of large chunks of our industrial base, and a huge thirty year burst of activity as the new economic assets (windmills, powerlines, apartments, automated factories) will happen. Starting now. Think stenographers, boilermen and turbine engineers at Hazelwood).
    I don’t see either major federal political party talking seriously about this.

    • Carl Raymond S 2 years ago

      Unemployment on a mass scale. A burst of (economic) activity.
      Pick one.

      • Chris Drongers 2 years ago

        Yeah, I know. My thought was that once the existing power/transport/urban systems are adjusted to distributed generation, electrified robotic transport and a lower consumer demand (one car will be shared by several families to lower per use cost so build less cars, ditto holiday homes, recreational boats, office spaces, factory floors) the labour demand will decline back to a longer term maintenance and incremental build level.

        On balance, loss of drivers/retail clerks/manual assembly lines/simple lawyering/basic medicine will (in my opinion) be much greater than the capital intensive but relatively low labour build of power assets and computer networks.

        Labour use to re-build our cities to a denser, public transport oriented design will be one of the few bright spots, along with high cost (for those who can afford it) aged care where cheaper robots to lift/wash/feed/monitor would do the job for lower income people.

        • Chris Jones 2 years ago

          Not to worry, plenty of jobs rebuilding cities above new waterlines, making controlled environment greenhouses, and military fending off nations of climate refugees. Oops sorry, none of this until 2050, promise…

      • nakedChimp 2 years ago

        unemployment on a mass scale it will be

        That little bit of change of production from former ICEV to BEV and gas/coal assets to wind/pv assets will not be able to suck up all the people who will be made obsolete by AI.
        Everything that is automatable will be automated.
        And the smarter AI gets, the more will be affected.
        Sure, we will find a couple new jobs in there somewhere that haven’t been there before, but not on a big scale.

        And unemployment is only a problem, because people derive their right for access to goods and services from it.
        That’s why some start to opt for a UBI.
        The fight that will happen will be about WHO is going to pay the UBI, so that people can get the goods and services that the robots/AI are producing.
        Our socio-economic system, where a lot of that stuff is in the legal possession of a few only will have a very very hard time to adapt to this truth. The ‘owners’ of the robot/AI will not agree with the viewpoint that the products of their assets are worth less then and try to keep up high profit ratios via IP/legalese that keeps out competition.
        And thus at the very core of our most pressing problems are essentially monopolies/cartels.

        The fight of FF vs RE was child’s play compared to what this will be.

        PS: and then add to this our stand-off with an AI that might not be benevolent once it surpasses human intelligence at a factor of 100 or more..

        • wideEyedPupil 2 years ago

          no sure sure it will be so much harder. If people aren’t working on mass or are all underemployed, that effects their vote every single time. RE is a nice to have kind of issue for many underemployed. If government prides over a situation where enough people are staving, it’s a recipe for some kind of a revolution. That’s the only reason Liberals don’t scrap out Centrelink system of benefits entirely.

        • Carl Raymond S 2 years ago

          You are probably right. But at least it’s a problem that we can sort out as it happens. With the CO2 problem, by the time people en masse realise it’s a problem, the oceans have already begun to acidify, a point of no return.
          So if given a chance to make a point to people, it’s going to be ‘fossil fuels – we gotta stop’, every time.
          There’s also the possibility that we actually need AI – systems that build systems that generate energy and storage, in order to kick fossil fuels. That further holds me back from worrying about AI at this juncture.

    • Brunel 2 years ago

      The Greens finally talked about UBI this year – and I am not sure if it is at the top of their manifesto list.

      USA almost got UBI in 1970 and AUS would have followed suit. We got so damn close! The bill actually passed the lower house but got blocked in the upper house by the Democrats who said the payments were not high enough!

      Oh dear. So many Americans/Aussies/Britons were made homeless since 1970 and UBI would have meant an end to homelessness. Every voter would have been guaranteed an income. Crime and doctor visits would have come down as well – partially paying for expense of UBI in AUS.

      UBI already exists in Iran and Iranians did not quit their jobs.

      • Barri Mundee 2 years ago

        Whilst I agree with your sentiments I am convinced a UBI is poor economic and social policy. A BI would be fine for those too old or too disabled/sick to be capable of working. So a targeted BI could work but a UBI would be very inflationary. For those willing and able to work but cannot get it a Job Guarantee is far superior, as the article I link to below makes clear. Its a interesting read!,11486

        • neroden 2 years ago

          No, it wouldn’t be inflationary. You pull the money back out of circulation with progressive income tax on the wealthy.

          • Barri Mundee 2 years ago

            Yes you could do that but as the author points out: “you could double GST, eliminate all tax concessions, including on super and put income tax rates up by 10 or 15%. But good luck getting people to vote for that. More than likely, it would lead to all sorts of cuts to public services and privatisations. The opposite policies to those for which the Greens normally argue.”

          • Mike Westerman 2 years ago

            The NDIS is an example of a viable alternative where crucial valuable work has in the past not been paid work. There is enormous scope for incentivizing and rewarding currently unpaid work in say, the voluntary sector. This would increase the share of National Income from labour and be a strategy for cutting back on capital’s share. Otherwise automation will continue its share with disastrous results.

          • Brunel 2 years ago

            “good luck getting people to vote for that.”

            A clear majority of people in Ireland, Belgium, Finland, Israel, Russia want UBI. As I said, it already exists in Iran.

            A slim majority in Britain want it. Ed Miliband wants it:

            Most Americans do not – but then most Americans do not want healthcare either.

            “Best to focus on need rather than largesse for those that don’t need it.”

            I agree that the richest 45% of the population should be excluded from getting UBI.

            “The wealthy will mobilise to have it scrapped.”

            So how come the UBI in Alaska has been going since 1982?

            UBI would become like Medicare – I can see a GP for free and the right wing pricks tried but failed to put in a GP tax.

          • Brunel 2 years ago

            You can put in a UBI under the guise of residential electricity bill rebates – PM Howard rebated the LPG tank installation fees and QLD used to rebate the GST on petrol!

            So residential electricity bills would say “$400 credit” instead of “you owe $600”. You can eventually exclude the richest 40% of the population from getting a rebate after a few years.

            It would also kill the politics of coal and you could finally tax pollution.

            Then they could double the UBI under the guise of water bill rebates.

          • Hettie 2 years ago

            Why try to disguise UBI? To make any sense at all, UBI must be a livable income paid to every person over 18. No exceptions. Additional payments would be needed for the disabled.
            The UBI is indexed to a sensible cost of living measure, which the current CPI is not, and is also the tax free threshold. Additional income is taxed on a low but sharply progressive scale from the first dollar, making work attractive, and yet recouping the cost.
            The elimination of theadministrative cost of the current ludicrously complex safety net system would go a long way to paying for the new way.
            Displaced Centrelink employees could be redeployed to the ATO, ABS and other Gov’t bodies that have been stripped of staff.

          • nakedChimp 2 years ago

            Why stop at over 18?
            Fearful of people making kids without thinking about the long term future?

          • Ren Stimpy 2 years ago

            It would more likely put the money back into circulation, which is a good thing, because the wealthy have “– a mountain of idle cash which fails to cancel out its twin peak the mountain of debt because the wealthy are too terrified to invest it. –”


            A good selling point for a UBI would be if each recipient was compulsorily required to invest 10% of it for their future in their choice of a controlled selection of high productivity projects (new construction, infrastructure, green energy, etc.)

          • nakedChimp 2 years ago

            You need a money with demurrage for UBI to work, otherwise the cartels/monopolies in the hand of the few lucky ones will screw up the whole thing.
            It’s really that simple.

            Progressive taxation is not a bullte proof method and reeks of unfair treatment and will allow all sorts of loopholes.
            By allowing a truly free market capitalism, where even the transaction medium has to face competition, the ones with just the right amount of demurrage would win out and essentially not allow ANY permanent monopoly profits to happen, but enable short term high return, high risk gambles, which make capitalism so efficient and perfect to solve demand problems.

    • Hettie 2 years ago

      The Greens have had policy on this for some years.

  4. MG 2 years ago

    Shouldn’t VIC to TAS net interconnector flows be zero for the first 6 months of 2016, when Basslink was out? I can’t work out why the first chart is showing nonzero values for that time period.

    • AllanO 2 years ago

      The chart shows rolling annnualised flows, so it wouldn’t go to zero unless there had been a 12 month outage. But intuitively you would still expect to see more impact from the extended outage – proves that intuition ain’t always correct 🙂

      • MG 2 years ago

        That explains it. Thanks Allan!

  5. Phil NSW 2 years ago

    An interesting fact about the removal of the Carbon Price is it happened whilst there was a Liberal Victorian government. The percentage of brown coal generation did a U turn at that point and so did the electricity flow between Victoria and Tasmania yet 6 months later the Liberal’s Denis Napthine government was turfed out by Labor’s Daniel Andrews. Denis’s federal mate couldn’t safe his job with his poorly guided action which has taken 4 years to undo the damage he caused. Where would our emissions be had Abbott had some common sense rather than mates in the wrong industries.
    I think I could also draw another conclusion about that poorly guided action. Because it had the reverse effect on the price of retailed electricity to how it was sold to the electorate, households on mass are reacting by putting on rooftop solar at an ever increasing rate. Because the electricity generated by these solar installations is cheaper than FF generation it is actually accelerating the closure of the FF generators he was trying to protect. Well done Tony.

    • Carl Raymond S 2 years ago

      Well that *might* impress the grandkids “I was an accidental hero”… till they hit reading age.

      • Phil NSW 2 years ago

        You have got to wonder what they will admit to in the future once their meddling is exposed for its destructive nature.

    • Steven Gannon 2 years ago

      “He who holds fast to the ways of antiquity shall surely suffer calamity.” (my favourite Lao Tsu saying).

      Abbott and co are learning this the hard way and they effing deserve it. I hope the bastard loses his seat next time.

      • Pixilico 2 years ago

        The only problem with that quote is that not only “He”, but all of us as well can “surely suffer calamity” as a consequence of “His” foolishness.

    • Ren Stimpy 2 years ago

      It’s interesting that Tas was capable of supplying 3TWh of energy to Vic. The problem with that during the carbon tax period – it wasn’t sustainable, as the Tas dams took a big hit and they had also had some drought issues at the time. But now Tas is starting to add wind farms. The more wind farms they have the cheaper their power will be, and the more sustainable their exports to the mainland will be. Tasmanians should all be using cheap wind power with their hydro power used for firming only. Victorians should be doing the same – big local wind farms (and solar) with Snowy hydro and Tassie hydro exports over the Basslink for firming, to displace as much expensive gas peaking as possible.

    • wideEyedPupil 2 years ago

      Slight correction: PV on roofs is cheaper than fossil generation AND the transmissions and distribution network costs. Network costs, partly due to gold plating under bother GTE and privatised businesses are now 45-60% of residential bills (and even higher obviously once they have solar on their roof).

      Distributed RooftopPV mitigates against network fortification to meet once a year peak demand maximum events which recommends PV beyond a crude cost comparison with utility scale solarPV.

  6. Robin_Harrison 2 years ago

    Then what? Who needs targets when superior economics takes over?

  7. GregS 2 years ago

    Given how cheap your rooftop solar installations are, and how expensive your power is, I’m amazed that Australia doesn’t have more already installed. We pay about $2/watt in the US after rebates and our power prices average 12 cents per kilowatt hour. The payback time must be incredibly short over there compared to the US.

    Look forward to seeing solar grow even more in Australia.

    • Phil NSW 2 years ago

      3-4 years on average

    • Mike Westerman 2 years ago

      Yep – 1GW/a of rooftop going in regardless.

    • Hettie 2 years ago

      I calculated 44 months for my 5 kW system, but now there is the threat of lower feed in tarrif and lower wholesale power price, which may well NOT flow through to the retail price.
      In the 8 months I have had the system, it has eliminated my power bill, funded the prepurchase of power to mid July ($39.06) and paid out $400.00 cash.
      Without the solar, I would have paid approximately $1,200 for my power, and I consume very little, even for a one person household. Annual total approx $1,700.
      Taking that $437 credit into account, my repayments are slightly less than I would have paid for the power.
      Based on present prices, In four years, I will have no power bill and no repayments.
      Since I purchased, prices have fallen quite sharply, so today’s buyers will have even shorter payback periods.

  8. metadatalata 2 years ago

    The biggest gamechanger will be small-scale stored energy/PV systems. It is so close now to being of better value than grid power that there will be a wholesale adoption of energy self-sufficiency probably starting before this year is out as battery installations become feasible. For most households with PV systems, they are still at the mercy of government policy which will be solved with the addition of battery storage.

    • Calamity_Jean 2 years ago

      Australia may end up being as important to the adoption of batteries as Germany was to PV or Denmark to wind power. Hurray Australia!

      • nakedChimp 2 years ago

        And funnily enough not to the political influence of greens, but by the political influence of incumbents.
        Let that sink in..

  9. Chris Baker 2 years ago

    Interesting that SA has changed from net importer to net exporter. The power would flow from low to high priced states. To now be a net exporter must mean that it’s prices are lower than Victoria? Otherwise it would have flowed the other way. This is surely a strong indicator that renewables are lowering generation prices in SA.

    • Hettie 2 years ago

      Ummm, surely the factor which governs the flow of electricity is demand, not price?

      • Chris Baker 2 years ago

        And whether you’re selling apples or electricity if the demand is up, so will be the price? So if you have apples for sale in one market and the next market is offering higher prices you would probably take your apples to the best paying market, adding a bit for transport. I think the electricity market should work the same. For the owner of the interconnector to make some money she would need to buy low, say in SA and sell high in Victoria. When I look at the pocketNEM app it shows the flow always from low to high prices. Just now the power is flowing from Qld>>NSW>>VIC>>SA and prices are $64.78-$76.41-$88.19-$100.64

  10. Terry Harrison 2 years ago

    What is this national grid, either the pollies are lying or WA has been chopped off

    • Hettie 2 years ago

      Yes. WA is separate, because of the great distances involved. Virtually all centers of population are along the west coast. Interconnecters from SA and NT are not practical.

  11. wideEyedPupil 2 years ago

    Another interesting point is that gas-fired generation has increased in the last year or two in South Australia as a result of the Northern closure, but is still below the levels of a decade ago.

    That’s not what I’m seeing on “figure 7”, it’s below but it’s certainly less than 10% below.

    Which is interesting because models with 50% wind tends to use considerably less gas than meeting that same demand with all FFs. I expect as SA moves from 50% to 75% and beyond the gas reliance will drop to infrequent use and maybe 33% of current and 2008 levels. Especially if they can pull cheap (new) wind from (western) Victoria at times when their wind is underperforming.

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