Renewable energy is slashing emissions, now it’s cutting prices too

The rise of renewable energy in the grid is driving down emissions and power generated from wind and solar farms is starting to drive down the cost of electricity as well.

Renewable energy accounted for 39 per cent of the east-coast power grid during the first three months of this year, up nearly 2 per cent from the same time in 2023, figures from the Australian Energy Market Operator reveal.

While heatwaves and extreme weather have put extra strain on the network and power companies, the wholesale cost of electricity generation has fallen 8 per cent in the first quarter of 2024.

“The move to renewables over traditional coal-fired power generation is well and truly underway and is happening at record pace,” AEMO’s head of reform Violette Mouchaileh said.

Wholesale power prices – what retailers pay generators for electricity before selling it to customers – can typically account for up to one-third of retail power bills for households and businesses.

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“We are increasingly seeing renewable energy records being set which is a good thing for Australian consumers as it is key in driving prices down and National Electricity Market emissions intensity to new record lows,” Mouchaileh said.

AEMO released its Quarterly Energy Dynamics report on Tuesday, which found large scale solar was the fastest growing form of renewables, having increased in capacity 18 per cent in the past 12 months.

The greenhouse emissions from electricity generation peaked in 2009 at 63 million tonnes of CO₂ and the rise of rooftop solar, followed by solar and wind farms, has been cutting coal and gas use and driving down emissions ever since.