SWIS win

WA’s South West Interconnected System just cracked it — more than 50% renewables in the grid over the full six months comprising spring and summer — but the eastern states’ National Electricity Market missed the mark.

And it should be noted that the renewables shares typically retreat in the autumn and winter as wind and solar droughts (the “dunkelflaute”) strike.

We can blame summer heat waves and perhaps floods for the NEM’s near miss.

In the spring renewables were virtually at parity at 49.9% of NEM generation; in the summer this fell to 49.1% as coal and gas plants rallied a little to meet cooling-induced demand peaks. For the spring/summer six months renewables averaged 49.5% of NEM generation.

It was the reverse in the SWIS, where renewables averaged 50.5% for the spring/summer six months, thanks to a sharp jump to 51.7% in the summer from 49.1% in the spring.

Charts for this newsletter were prepared by Juliette O’Brien at onlyfacts.io using Open Electricity data.

Way out West

Utility solar generation soared in the SWIS over spring/summer, up 58.1% compared with the same period a year ago. Wind and rooftop solar increased 7.9% and 10.9% respectively, and coal and gas retreated by 9.4% and 12.1%.

In the NEM, wind did the heavy lifting over spring/summer, up 21.8%, and utility and rooftop solar had solid increases (14.1%, 8.3%) while gas generation was sharply lower (-21.7%) and brown and black coal generation retreated.

Summer followed a similar pattern to spring in the NEM, albeit with a sharper drop of 32.9% for gas generation and a recovery for hydro (up 8%).

The SWIS’ mix changed a lot: utility solar generation more than doubled in the spring (+136.2%) and coal generation increased 16%, with gas down 20%; in the summer coal generation shrank more than a quarter (26.3%) and utility solar was up 'just' 24%.

The lumpy nature of the changes reflects commissioning schedules for utility wind and solar, and how that moderates supply imbalances that bring coal and gas back into play.

Emissions advantage

The SWIS has a larger share of gas generation in its fossil fuel share, which means it has a much lower emissions intensity than the NEM.

Even so, its surge in utility solar generation helped to press home this advantage in the summer, with SWIS emissions intensity plunging to a new low of 323.3 kilograms of CO2/CO2 equivalent per megawatt hour, a 12% drop from spring.

SWIS emissions do not usually fall so sharply from spring to summer — in 2024-2025 they actually increased — so the state’s investments in renewables and big batteries appear to be biting.

In the NEM, emissions typically increase moderately from spring to summer as temperatures rise.

This has happened in each of the last three years and this year was no exception. NEM emissions intensity increased from 475 kgCO2e/MWh in the spring — a record low — to 486.3 kgCO2e/MWh.

Tariff relief?

Most NEM states are enjoying falling wholesale prices, which could point to better news for consumers when the Default Market Offer (DMO) and Victorian Default Offer (VDO) are reset this month.

(The DMO and VDO are benchmarks against which energy retailers are required to measure the discounts they offer customers. Wholesale prices are set in the NEM’s spot market. SWIS wholesale prices are set differently and not included here.)

The exception is South Australia, a small state on the extremity of the NEM with limited interconnection to the larger Victoria/NSW markets. SA’s prices averaged $102.30/MWh over the spring/summer six months after a surge to a summer average $140.50/MWh.

Prices in the other states have fallen to two to five year lows, which should earn their energy users some relief from large retail tariff increases seen in 2023 and 2024 (and 2025 in NSW).

Wholesale prices account for 29% to 42% of typical retail electricity bills, with network costs the next biggest chunk (32%-42%), according to St Vincent de Paul Society and Alviss Consulting‘s December 2025 Tariff Tracker.

At some point in the near future huge investments in new transmission required to deliver far flung solar and wind energy to population and demand centres (and distribution network enhancements to host more solar, EV charging and data centres) may offset decreases in wholesale prices.

But we may not have reached that point yet, says Tony Wood, senior fellow in energy and climate at the Grattan Institute.

That’s good news for energy users in those states — for the time being at least.

Battery discharge and charge continues to surge, up well more than three-fold over both the spring/summer six months and the summer. (The battery charge and discharge numbers are monthly averages.)

Big batteries are the easiest form of utility-scale supply to win planning approvals for because of their modest footprint, and they dominate the Australian Energy Market Operator's grid Connections Scorecard.

Of course, that just shows how far behind the curve utility wind and solar projects are in the planning approvals queue, and how much work remains to be done, despite an encouraging flurry of approvals in late December.

The bottom line: things are heading in the right direction — but not nearly fast enough for the government to hit its climate targets.