Coal generation in Australia's NEM fell by 1.11GW in Q1

A surge in power outages in February and March in New South Wales drove the decline.

The average black-coal generation in Australia’s National Electricity Market (NEM) fell 1.11GW YoY to 12.02GW in Q1, according to data from the Australian Energy Market Operator (AEMO).

The New South Wales fleet led the reduction, recording a fall of 885MW. This was attributed to low operational demand, displacement by solar and gas-powered generation (GPG), and a comparatively high number of outages in February and March.

This was despite a structural shift in black coal-fired generation bids into lower priced bands, which was influenced by lower gas market prices, reduced operational demand, and the continued growth in variable renewable energy (VRE) output.

Also read: Australia's solar and wind capacity additions hit 6.3GW in 2019

Meanwhile, brown coal-fired generation dipped by 81MW. The 226MW drop at power station Loy Yang A was largely offset by bigger output from Yallourn and Loy Yang B.

Lower operational demand and higher VRE output in the southern region also caused gas-fired generation to decline 566MW on average compared to Q1 2019. South Australia and Victoria recorded large output reductions of 266MW and 148MW, respectively, whilst Queensland’s dipped 22 MW.

In contrast, average grid-scale VRE generation, which includes wind and solar, grew 551MW YoY to 2,667MW in Q1, due to continued ramping up of recently installed capacity as well as a slight addition from new projects. However, this is lower compared to Q4 2019 due to reduced capacity factors.

Likewise, hydropower generation climbed 208MW YoY, despite lower spot electricity prices and demand. This was driven by a reduction in the price of hydro offers, which coincided with lower gas market prices, increased rainfall, and lower spot prices.