Our not-nearly-good-enough energy transition

September quarter data for the National Electricity Market (NEM) and WA’s South West Interconnected System is in, and it’s another chapter of one-step-forwards, two-steps-back in our faltering energy transition.

In other words, not nearly good enough at a time when the transition really needs to get motoring if the Albanese government is to have any chance of reaching its 2030 and 2035 climate targets.

In the NEM, which covers the eastern states and South Australia, coal generation barely retreated, and hydro effectively stalled.

(All comparisons are with the September quarter of 2024 unless stated otherwise. We’ve gone a day early, but the last day of September won’t make much difference. The data was extracted and analysed by OnlyFacts, and sourced from Open Electricity.)

Wind generation increased an impressive 14.3%. But because overall operational demand increased by 3.6% — more than usual — emissions from NEM generation were flat.

In WA’s SWIS, coal generation actually increased, wind generation flatlined and utility solar soared from a low base. The upshot: SWIS emissions increased.

Prices were a bright spot, decreasing by about a quarter from the same period last year in most NEM states, though still high by historical standards.

Stubborn coal

With wind and utility solar generation in the NEM up more than 14% for the quarter, and rooftop solar up 10.2%, you’d expect coal to take a solid hit.

It didn’t happen. Black coal generation in the NEM barely budged, although brown coal fell 5.8%, and gas 10.9%.

It doesn’t seem to add up. The swing factor appears to have been operational demand, which University of NSW senior energy researcher Dylan McConnell says grew by a larger than usual 3.6%.

Whether due to electrification, electric vehicles or data centres, or all three, a chunk of the increased wind and solar generation just met increased demand, rather than displacing coal and gas.

In the SWIS, utility solar generation jumped a whopping 94% from a low base, rooftop solar just 5.4%and wind and hydro were flat. Coal generation increased 11.6%, and gas retreated 1.6%.

Not what you'd call progress

Fossil fuels’ share of NEM generation continued to creep downwards, falling to 57.9% of total generation from 60.9% a year ago. Renewables’ share ticked up to 42.1% from 39.1%.

In the SWIS, fossil fuels’ share inched downwards to 63.8% from 64.6%, and fossil fuels crept up to 36.2% from 35.4%.

It’s barely progress.

"We actually just need to get this stuff connected and in the grid. It's one thing to have stuff contracted but actually getting the kit in the ground, and connected and sending electricity to the grid is still a challenge,” McConnell says.

Backwards step for emissions

We often see grid emissions intensity increase seasonally — say, from summer to winter — but we only occasionally see emissions increase compared to the same period a year ago, which removes seasonal factors.

Western Australia achieved that dubious honour in the September quarter, increasing the intensity of SWIS emissions to 468.4 kg CO2 per megawatt hour from 452 KG a year ago.

NEM emissions didn’t increase, but they barely fell, to 571 kg//MWh from 573 kg/MWh a year ago.

Green shoots

Price falls were substantial compared to a year ago, from 22% in Queensland to 25% in Victoria and NSW and 27% in South Australia. Victoria lost its status as the cheapest NEM state.

Prices in the mainland NEM states were also down sharply from June quarter prices, which were elevated by early winter cold spells coinciding with solar and wind droughts and generator outages.

Batteries, the other bright spot, increased their contribution to NEM output by 145% to 445 gigawatt hours, and to SWIS output by a whopping 501% to 179 GWh. Round trip efficiency — output to charging — was just below 80%.

With large and small battery installations accelerating, there's some hope.