Green Energy: Wind and solar penetration in NEM increases again

NEM generation by wind and solar continues to increase

Wind and grid-scale solar penetration in the National Electricity Market continues to rise, although more than 50% of our electricity needs were still provided by black coal in the June Quarter.

At 32.1 million tonnes carbon dioxide equivalent (MtCO2-e), emissions from the NEM were the lowest on record and 1% lower than the same period in 2020, despite increased demand.

Average generation from wind and grid-scale solar increased by 457MW in the second quarter of 2021 compared to the same period in 2020, with combined wind and solar increasing from 12.6% of fuel supply in June 2020 to 14.5% in the same period this year, the AEMO’s Quarterly Energy Dynamics report today shows.

Hydro generation also increased marginally despite dry conditions in some parts of the east coast, with use of black coal (50.7%), brown coal (17.5%) and gas (7.9%) all declining slightly, but still largely comparable to 2020 levels.

On April 11, between 11 and 11.30am, renewables hit a record 57% of power generation in the NEM, up from a previous high of 56% in October.

New AEMO chief Dan Westerman recently stated the market operator wants to have the conditions in place for 100% of the generating capacity to be supplied from renewables by 2025.

Wholesale electricity prices on the east coast rose starkly after two years of declines, from $37/MWh in the March quarter to an average $95/MWh in the June quarter.

Queensland recorded a record average of $128/MWh after the outage following the fire at the Callide C power station, with rising fuel costs and commodity prices also contributing to a 3113MW drop in offers below $100/MWh, while cold nights in Sydney and Brisbane saw an increase in demand.

Coming off a low base the West saw a sharp increase in solar, distributed solar and wind generation, but also a 17% increase in coal generation out of Collie (140MW) as it shivered through its coldest winter in three decades.

Wind generation increased 37% by 77MW on 2020 levels as the Yandin and Warradarge wind farms came online and areas of WA’s north recovered from the impacts of Cyclone Seroja, with a 91MW increase on the March quarter. An all time wind generation record of 945MW was set on June 27.

Meanwhile Perth’s widespread distributed solar generation increased by 40MW, or 32%, with another 351MW of capacity added in the past year, and grid scale solar was up 662% or 22MW on 2020 levels off a low base with the new Merredin Solar Farm and extension ot the Greenough River Solar Farm switching on.

Gas fired generation fell by 15% as it was displaced by lower priced supply from other fuel types.

Tilt sale gets final court approval

Investors who backed Tilt Renewables (ASX:TLT) following its demerger from Trustpower, led by Kiwi fund Infratil (ASX:IFT) are inches from a major payday as the Australia and New Zealand wind generator received full court approval for its sale to Powering Australian Renewables and Mercury NZ. (ASX:MCY)

Just three years ago the company was in play as Infratil and Mercury, who hold an overwhelming proportion of the company’s shares, made a bid to buy Tilt out for NZ$2.30 a share.

Minority shareholders held out.

The successful bid which will see AGL backed PowAR secure Tilt’s Australian operations and Mercury swallow up its Kiwi assets at $8.10 per share, minus a special 6.5c a share dividend.

At around NZ$3b the successful 2021 bid came off the back of a major bidding war that caused Tilt shares to skyrocket and compares well to the $720m value of the offer Infratil and Mercury lobbed in 2018.

Good news in the end for Infratil and around 9500 minor shareholders on the Tilt register.

With shareholders overwhelmingly approving the deal and the final court approval, Tilt shares will trade in Australia and New Zealand for the final time on July 27 with the scheme to be implemented on August 3.