Wind and solar take wholesale electricity prices below zero for whole week in Victoria

Murra Warra wind farm

The state of Victoria in December became the first state to experience negative wholesale electricity prices for a whole week, as high wind and solar output and mild demand pushed prices below zero.

The Australian Energy Regulator, in its latest quarterly wholesale market report, says that in the week starting December 11, the average price in Victoria  was minus $1.64/MWh.

“Average weekly prices fell as the quarter unfolded, due to low demand coupled with higher wind and large-scale solar output over the quarter,” it notes.

“This was particularly pronounced in Victoria, where prices fell to a record low negative average weekly price of -$1.64/MWh in the week starting 11 December (Figure 1.4).

“This was due to low demand resulting from long daylight hours increasing rooftop solar output, mild weather conditions together with particularly strong wind output that week.

“This is the first time any region has seen a negative average weekly price,” it added, noting that spot prices can fall below $0/MWh when there is low demand and a high amount of cheap generation on offer.

The report notes that average prices remained high in the fourth quarter, at least compared to the same period in earlier years, but – like the Australian Energy Market Operator – it observed a growing north-south divide in prices between the coal dependent states of Queensland and NSW, and Victoria, Tasmania and South Australia.

“On the mainland, there was a price divide between the northern regions and the southern regions, with Queensland and NSW recording higher average quarterly prices than Victoria and South Australia,” it says.

This is at least partly due to the record number of negative price events, which totalled 3,629 instances of negative 30-minute prices.

“Three-quarters of those negative prices were in Victoria and South Australia and were due to low demand during the day (as a result of increased rooftop solar output) coupled with higher wind and large-scale solar output driving prices down,” it noted.


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