Australian Energy Statistics Show a Favorable Outlook for Solar Power

1st July 2020

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The Australian electricity sector is still dominated by fossil fuels, especially brown and black coal. However, while the market share of fossil fuel generation is slowly shrinking, renewable sources are growing at a fast pace.

According to the State of the Energy Market 2020 report from the Australian Energy Regulator, over 93% of investment has focused on solar and wind power since 2012-2013. At the same time, coal power plants that reach the end of their service life have been shut down permanently.

Solar panels were once an environmentally friendly but expensive option. However, thanks to cost reductions during the past two decades, solar power now makes sense as a business decision. At the utility scale, wind and solar farms can now beat the generation cost of many coal-fired power plants. At the same time, residential and commercial solar arrays can produce electricity at a lower kWh cost with respect to local tariffs.

Australia has a combination of factors that benefit solar power: abundant sunshine, proximity with solar manufacturers in Asia, favorable tariffs for solar technology imports, and abundant financing options for homes and businesses. Local electricity prices are among the highest in the world, increasing the savings achieved by solar panels.

Overview of Electricity Production in Australia

In May 2020, the Australian Department of Industry, Science, Energy and Resources published some interesting data about electricity production in 2019. These figures indicate the growth of renewable energy compared with fossil fuels.

In 2019, the estimated electricity generation in Australia was 265,117 gigawatt-hours. This includes electricity produced by homes and businesses for their own consumption.

  • Fossil fuels accounted for 209,636 GWh, which is 79% of the total generation.
  • Coal represents 56%, natural gas represents 21%, and oil products represent 2%.

Fossil fuels still produce most of the electricity consumed in Australia. However, their share of total generation decreased since 2018, from 81% to 79%. For coal power in particular, the drop was from 60% to 56%. On the other hand, renewable energy sources are growing fast, and solar power had the largest growth between 2018 and 2019:

  • The output of large-scale solar PV systems increased from 2,339 GWh to 5,495 GWh, which is more than double (an increase of 135%).
  • The output of small-scale solar PV systems increased from 9,941 GWh to 12,455 GWh, which is 25% more.
  • Small-scale solar power represents 4.7% of total generation for 2019, while large-scale solar power represents 2.1%. Their total share is 6.8% of electricity production.

Hydroelectricity and wind power are also important renewable sources in Australia, with a respective production of 14,430 GWh (5.4%) and 19,525 GWh (7.4%).

The Role of Batteries in the Australian Power Sector

Batteries are gaining importance in the electric industry, since they can compensate for the main weakness of solar panels and wind turbines – their variable electricity output. Batteries also have a very fast response, and they can stabilize power grids by supplying or consuming power within milliseconds. This helps stabilize the voltage and frequency provided to  electricity consumers, reducing the risk of blackouts.

In December 2017, South Australia made headlines globally for installing the world’s largest utility battery at the time. The system is called the Hornsdale Power Reserve, and it uses a 100 MW and 129 MWh battery array delivered by Tesla. The system had a cost of $90 million, but it had already saved over $40 million after its first year of operation.

More battery systems have been deployed in the country since December 2017, especially in South Australia and Victoria. The Australian Government also tracked the amount of electricity delivered by batteries in 2019:

  • Batteries in SA delivered 45.8 GWh.
  • Batteries in VIC delivered 48.5 GWh.

These amounts are not added to the generation data, since batteries must get their electricity from another source. However, their ability to deliver instant power to the grid is unmatched by conventional power plants.

Conclusion

Solar power and other renewable sources are being deployed at a fast pace, while conventional generation with fossil fuels is gradually shrinking. This has been possible thanks to the decreasing cost of renewables, combined with Australia’s favorable conditions.

Homes, small businesses and corporations can all take advantage of solar power. In addition to offering electricity savings, solar power reduces the environmental footprint of electricity consumers. For each kilowatt-hour produced, a coal power plant releases more than one kilogram of emissions into the atmosphere. On the other hand, solar panels only have the environmental impact of production and installation, and then operate with zero emissions.

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