Recently, Australia's National Electricity Market (NEM) had a close call with widespread blackouts due to sudden failure of aging coal plant.
Wind and solar are rapidly entering the NEM (7 GW of new wind and solar in 2020). Wind, solar and hydro (~6%) supply 30% of electricity, and are tracking towards 50% in 2025. Gas supplies 5% and coal the balance. For context, the NEM serves 20 million people (half of California) and is physically isolated from other grids.
New pumped hydro (2.3 GW, 350 GWh) and batteries (2 GW, 2 GWh) are currently under construction to manage rising wind and solar.
Wholesale electricity prices halved over the past year compared with the average over 2016-19 as a flood of new low-cost solar and wind electricity entered the market (graph below). However, a price spike occurred in June and July coinciding with a major fire at the 1.5 GW Callide coal power station on 25th May and a major flood at the 1.5 GW Yallourn coal power station in June. Prices fell sharply in August as more wind and solar generation occurred and as Yallourn and parts of Callide resumed normal operation.
A solar/wind grid is inherently stable because there are large number of small generators interconnected with a web of transmission rather than a few large generators, the failure of one causing significant loss of generation.
The economics of solar and wind are compelling, as is apparent from the low wholesale spot prices seen in the graph. Australia is demonstrating that rapid deployment of solar and wind leads to declining emissions and low electricity prices.
