Energy issues reported
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Electricity prices have been cooling off, but a new report shows market volatility remains a concern.
The Australian Energy Regulator (AER) has released its State of the Energy Market report for 2024, shedding light on trends across Australia’s electricity and gas markets.
It shows that while electricity prices have come down from their extreme 2022 highs, market volatility remains, driven by fluctuating weather conditions and outages in both generation and network systems during high demand periods.
In a year marked by energy highs and lows, New South Wales, Victoria, South Australia, and Tasmania recorded historically low electricity demand, while Queensland saw record highs.
Meanwhile, consumers are increasingly powering the energy transition, with over 20 gigawatts of rooftop solar now contributing to the National Electricity Market (NEM) - an increase of 2.9 gigawatts since last year.
AER chair Clare Savage says the energy sector's rapid evolution demands a stronger focus on efficiency.
“We’re calling for a renewed focus on network utilisation and improved efficiency - for industry to look for ways to more effectively use the existing network before investing in new assets,” Savage said, calling on the sector to “get creative”.
The regulator says its Energy Innovation Toolkit is enabling trials of new energy products and services that could broaden consumer choices and potentially lower costs.
The report also shows significant changes in gas markets, with a growing shift towards electrification in the domestic sector.
Though gas remains important for electricity reliability and large industries, the past year has seen an uptick in the move towards cleaner energy sources.
A major milestone for the NEM in 2024 has been the rise of rooftop solar, now generating 25 per cent of the maximum electricity that can be produced on the grid.
In 2023/24, rooftop solar reached 20,159 megawatts, making it the highest capacity generator, surpassing black coal, which contributes 20 per cent.
Across the year, rooftop solar also contributed to record-low demand in the NEM, particularly from July to September.
During October to December, with longer days and more installations, rooftop solar hit record outputs, while large-scale wind and solar reached a record 26 per cent of generation output.
In early 2024, high rooftop solar output drove down minimum daily demand in Victoria and South Australia.
However, as the year progressed into shorter days and low wind conditions, output from solar and wind decreased, prompting increased reliance on higher-priced gas and hydro generation.
Despite some price relief, affordability remains a challenge, with energy debt levels rising for many consumers in 2023–24.
Rebates from government programs provided some relief, but economic pressures continued to weigh heavily on households.