Fossil fuels fall to record low in power grid as renewables hit new high

Fossil fuels sank to their lowest-ever levels across Australia’s east-coast electricity mix in the final three months of 2022 as green power supplies overtook black coal’s output for the first time in the history of the grid.

The Australian Energy Market Operator (AEMO), in new a report on Wednesday, reveals renewable energy generation has hit a record high, supplying on average 40 per cent of the grid’s power during the December quarter, beating the previous record of 35 per cent set in the same period of the prior year.

Until now, black coal – the fuel burned at the biggest power stations in NSW and Queensland – had been the single largest source of electricity across the nation’s main power grid.

When black coal is counted with brown coal, which is used in Victoria’s power plants, the fuel still delivers the dominant share of the east-coast electricity mix. However, large wind and solar farms coupled with Australians’ booming uptake of rooftop solar panels, have been radically reshaping the market and squeezing out fossil fuels.

The AEMO figures show that both black and brown coal fell to their lowest average shares since the east-coast electricity market was created in 1998. Gas-fired power generation, meanwhile, declined to its lowest average quarterly output since 2004 amid low demand and historically high domestic gas prices.

Violette Mouchaileh, AEMO’s head of reform delivery, said output from large-scale wind and solar farms across the grid grew strongly during the quarter, producing 20 per cent of total generation as more renewable energy projects were commissioned and connected.

“This growth, along with the lowest output from coal-fired generation … saw National Electricity Market emissions drop to the lowest quarter on record at 26.4 million tonnes [of] carbon dioxide equivalent,” she said.

While peak renewable contribution records were broken and fossil fuels continued to fall, AEMO stressed that coal and gas “both remained essential” to the supply of reliable electricity to homes and businesses.