Power prices rise 31pc despite wind and solar glut

afr.com:

Power prices surged to their second-highest March quarter in 18 years, despite a glut of solar and wind production that sent prices into the negative during the middle of the day, according to a new report.

While electricity prices have not returned to the record highs of last year – which forced thetemporary suspension of the market – the quarterly update from Australian Energy Market Operator said average wholesale power prices hit $108 per megawatt hour in the National Electricity Market, 31 per cent higher than the Q1 average of $83/MWh. AEMO forecast that average prices over the next year would be even higher.

Increased output from grid-scale solar helped push down electricity prices during the day. 

AEMO’s quarterly update also found increased output from wind (398 MW) and grid-scale solar (347MW), driven largely by newly connected or commissioned units, helped reduce overall operational demand across the NEM.

During Q2, Queensland experienced a 69 per cent jump in output from grid-scale solar and Victoria a 27 per cent increase in wind production.

The surge of cheaper renewable energy during the middle of the day meant wholesale prices were zero or negative for 9 per cent of the quarter.

Negative pricing is where power generators have to pay to sell their output into the wholesale market. This happened most in South Australia (17 per cent of the three-month period), followed by Victoria (13 per cent) and Queensland (9 per cent).

This increased between 9am and 5pm, to 29 per cent in SA, 20 per cent in Victoria and 25 per cent in Queensland.

Despite the glut of wind and solar, prices still increased in Q2, with NSW having the highest average quarterly price ($137/MWh), followed by Queensland ($126/MWh), South