Renewable Energy Index - September 2018
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.
In light of recent electricity industry claims that we are on the verge of too much solar power,
this edition of the Renewable Energy Index provides a special focus on the time profile of solar PV generation and the value of the solar rebate program.
- By 2021 solar will certainly have become a substantial source of power over daytime periods delivering around a fifth of the National Electricity Market’s power from 9AM to 5PM averaged across the year, and peaking as high as 40% around midday during low demand periods in summer.
- However, because solar generation is concentrated around the middle of the day, and over the summer months, it tends to coincide with high demands for power. For that reason there is little risk that solar generation will exceed demand leading to significant spilling of power. South Australia is closer to the point of solar reaching limits of demand but this will be resolved once the interconnector with NSW is built.
- At present solar achieves its highest share of overall generation in December. As shown in chart 1 covering December 2017, solar is simply knocking off the tops of the peaks in demand - reducing the requirement for expensive gas-fired power.
- Chart 2 replicates December 2017 conditions but with projected 2021 levels of solar capacity. This indicates solar will deliver on average around a quarter of power needs during the 9AM to 5PM period of December, reaching a peak of 43%.
- Looking to its averaged impact over a whole financial year in chart 3, broken down by quarter, 2021 levels of solar capacity will essentially act to replicate night time conditions for other generators but in the middle of day. In essence it will transform the market for conventional generators to one with a much shorter peak demand period, while creating two off-peak, low price periods – one during the middle of the night and one during the middle of the day.
- By significantly shortening the peak period, solar will substantially reduce the reliance on expensive gas, and allow for conservation of hydro water storages leading to lower electricity prices. In addition, it will deliver significant abatement by displacing much of the use of black coal for non-baseload requirements.
- Based on the work of the William Nordhaus who was recently awarded the Economics Nobel Prize, avoiding the emission of a tonne of CO2 in 2020 would deliver an economic benefit close to $58. By comparison the SRES solar rebate would deliver this abatement at a cost of $26 in 2021 - the date it was recommended to be abolished by the ACCC.