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Renewable Energy Index - December 2018

07 Feb 2019

To assist the Australian community in understanding the role and contribution of renewable energy to meeting our energy needs while also providing an important source of employment and reducing pollution, Green Energy Markets produces the monthly Renewable Energy Index.

The index tracks the contribution of the renewable energy sector broken down by fuel type and state on a series of metrics that are intended to translate abstract concepts such as megawatts and tonnes of CO2 into concepts the community can understand and appreciate such as number of households powered, and number of cars’ pollution avoided

December 2018

This edition of the Renewable Energy Index provides a special focus review of the 2018 year.

2018 will go down as the year that fossil fuels began an inexorable decline in Australia’s electricity supply.

Renewable energy broke through the 20% market share threshold in 2018 for the first time since the 1970’s. It achieved a share of 21.3% across the combination of Australia’s main east and west-coast grids. This was significantly up on its share of 17% in 2017.

  • Renewable energy’s growth was concentrated in Australia’s east coast grid, with limited growth in renewable generation in WA, in spite of the state’s rich renewable resources.
     
  • Figure 1 illustrates that within the east coast National Electricity Market (NEM) both coal and gas generation fell in absolute terms in 2018 relative to the prior year. Gas suffered a particularly big fall, dropping by 26% on the prior year. Wind and solar by contrast experienced substantial growth. Wind generation was up in the NEM by 26%, while solar was up by 35%. Hydro generation was also up substantially by 29%, however this represents more of a cyclical short-term phenomenon.
     
  • Extending our gaze back several years, Figure 2 illustrates the breakthrough growth renewable energy experienced in 2018. For wind the 26% jump in generation this year came after a almost no growth in 2017. Rooftop solar has had more steady additions of generation, but 2018 was exceptional with the incremental new generation 86% greater than the average annual additions of 2015-2017. Yet it was large scale solar farms that really jumped out of the blocks in 2018 with generation leaping up by almost 300% on the prior year. It passed the 1,000GWh mark over 2018, but with a far bigger impact to be seen this year and next as thousands of megawatts under construction come online. Figure 2 also shows how hydro tends to see-saw quite dramatically and 2018 happened to be an up year. However, given just how much wind and solar capacity will come online over 2019, hydro could have a down year in 2019 and overall renewables will still grow its market share.
     
  • While renewables leapt up in 2018, the overall task of decarbonising the grid remains substantial. Figure 3 shows that while brown coal and gas are in decline, the large gains in black coal generation since the carbon price was abolished still remain. Black coal generation is likely to decline this year and next as more than 10,000MW of renewables capacity is added to the grid. But much more renewables capacity is required to bring carbon emissions in line with Australia’s international commitments.

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