For a few groundbreaking minutes on Sunday, Australia’s solar producers out-generated coal—but experts warn the country is still far from meeting its Paris Agreement commitments.
“In spring or the shoulder seasons you have the combination of low demand, because there’s no heating or cooling, and then nice weather on the weekend. Those factors combine, and you get these giant shares of renewable energy that generally push out coal,” University of Melbourne renewables researcher Dylan McConnell told The Guardian.
Electricity prices went negative as supply exceeded demand between 8:30 AM and 5 PM on Sunday, August 22, meaning energy producers were actually paying to continue running. The negative prices were particularly damaging to coal-fired generators, which can be costly to scale down—often forcing operators to continue running even at a loss. Solar and wind producers, meanwhile, are able to cheaply curtail their production.
Renewables would have held an even great share of Australia’s power generation on Sunday if they hadn’t shut down to avoid the price hit, The Guardian notes.
“What it shows is that there’s already more renewables that could have gone into the grid if the coal plants were more flexible and transmission was upgraded,” explained energy analyst Simon Holmes à Court.
Current models project that Australia must build out an additional 51 GW of renewable energy capacity by 2042 to meet its commitments in the Paris Agreement. Only 3 GW of new solar and wind are currently under development.
The Clean Energy Investor Group (CEIG), “an 18-member body that advocates for investors in large-scale renewable energy projects,” has already called on Australia for financial reforms to encourage new investment, The Guardian says. CEIG CEO Simon Corbell said significant risks in the National Electricity Market—the system through which Australian power retailers and producers buy and sell electricity—are holding that financing back. Reforming investment guidelines to align with global markets will help Australia cover the costs of expanding its renewable sector, he added.
“To unlock an investment pipeline worth A$70 billion, we need effective market reforms and policy certainty, which could also save up to $7 billion in capital costs, or up to 10% of the cost of Australia’s clean energy transition,” he said.