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Australia is installing solar and wind three times faster per capita than the USA. How is it coping?

image credit: ANU
Andrew Blakers's picture
Professor of Engineering Australian National university

Andrew Blakers is Professor of Engineering at the Australian National University. He founded the solar PV research group at ANU. In the 1980s and 1990s he was responsible for the design and...

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  • Oct 4, 2021
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The Australian National Electricity Market (NEM) serves 20 million people along the eastern seaboard and has annual demand of ~200 TWh. Traditionally, coal generated most of the electricity supplemented with hydro (~7%) and gas (~13%). It is physically isolated and cannot exchange electricity with any neighbouring grid.

This is changing fast. In the month of September 2021, renewables (mostly solar & wind) provided 36% of generation. During daytime hours, the renewable fraction often exceeded 50% for many consecutive hours, and passed 60% on several occasions. Fossil gas generated 5%. Average wholesale spot market electricity price was US$30/MWh.

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Renewables are tracking towards 50% of total generation in 2025. The graph shows 6-month moving average generation shares of coal, gas and renewables. The shaded region is a linear projection of current trends for the next year.

For comparison, California had annual generation of 273 TWh in 2020, of which 40% came from gas and coal, 35% from other dispatchable sources (hydro, nuclear, geothermal, bio) and 25% from solar & wind. About 30% of California’s electricity was imported. California has vast off-river pumped hydro energy storage potential.

Balancing variable solar and wind in Australia is relatively challenging because dispatchable non-fossil generation amounts to only ~8% (hydro + bio) and because of the absence of connections to neighbouring grids. However, grid managers are learning to cope with the rapid rise of solar & wind.

Balancing is being provided by way of hydro, pumped hydro, batteries, demand management and load-following legacy coal and gas plant. Stronger interstate transmission also helps by smoothing out local weather and demand. Three existing pumped hydro systems will soon be joined by two more (2.3 GW, 350 GWh) presently under construction and another dozen are under consideration. Several GW of batteries are being deployed, and many more GW of utility, home and EV batteries are in the offing.

Australia is a global pathfinder for rapid deployment of solar and wind.

Key messages from the Australian experience are that there are plenty of off-the-shelf solutions that provide both grid stability and low electricity prices.  

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Jim Stack's picture
Jim Stack on Oct 4, 2021

Andrew, Just give Australia some more time and they will show you can replace the 100 years of fossil fuels. They also have some of the 1st and fastest growing advanced battery storage that has saved them money and made the GRID stable. Tesla promised and delivered 100 Mega Watts in less than 100 days of battery storage and delivered in less than that. It was so good they ordered more. I think that is a big key area. 

Michael Keller's picture
Michael Keller on Oct 11, 2021

Will also be a good test bed to see technical and cost impacts associated with massive deployment of renewable energy. Since Australia’s population isn’t really that big, potential economic damage to the rest of the planet will not be particularly noticeable.

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Andrew Blakers on Oct 11, 2021

Australia is convincingly demonstrating that rapid deployment of renewables reduces both prices and emissions.

Current Australian renewable energy fraction is 36% (mostly solar & wind), tracking towrads 50% in 2025. Current average wholesale spot market electricity price is US$30/MWh, which is half the average of over 2016-19. Emissions are falling.

The USA can learn a lot from Australia - the two countries are similar except Australia has 8% of the US population, mostly living in the southeast corner. The lesson is that rapid deployment of renewables:

  1. Reduces emissions
  2. Reduces electricity prices
  3. Reduces use of coal and gas
  4. Increases uptake of new transmission, pumped hydro storage and batteries
  5. Retains very high grid reliability.

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