South Australia’s push to lower electricity bills through a high share of renewables continues to be thwarted by its ongoing dependence on high priced diesel and gas generators – even if it is for just a few hours every couple of months.
The surge in prices over just a few trading periods – when the spot price of electricity can hit more than $20,000 a megawatt hour – is having a huge impact on the average price of electricity, an important factor in setting retail electricity prices.
It’s happened twice already this year in South Australia, the country’s most advanced renewable state – it has an average 75 per cent share of wind and solar and a goal of 100 per cent net renewables by the end of 2027 – once in summer due to hot weather, and again in June in a cold snap.
The January event, over the Australia Day holiday period, occurred in a heatwave and amid record demand levels as households turned to their aircons.
The demand spike was so severe the state’s growing fleet of big batteries quickly exhausted themselves, allowing gas and diesel generators to seize control of the market at set prices at eye-watering levels of up to more than $20,000/ MWh.
