NEM Hits Record Demand Amid Renewable Energy Surge

The National Electricity Market (NEM) has reached record-high demand levels in Q4 2024, driven by extreme temperatures and the shift from gas to electricity. The Australian Energy Market Operator (AEMO) reported a new December quarter peak demand of 33,716MW and an average quarterly total demand of 23,737MW, marking a 2.4% year-on-year increase.

• Renewable Boom:

  • Rooftop solar output grew 18%, while grid-scale solar increased 9%.

  • Renewables supplied a record 46% of NEM’s electricity, peaking at 75.6% on November 6.

  • Coal-fired generation contributed less than 50% of total power for the first time.

• Electricity Prices on the Rise:

  • Q4 wholesale prices averaged $88/MWh, up 83% from Q4 2023 but down 26% from Q3 2024.

  • New South Wales and Queensland saw record-high prices at $143/MWh and $127/MWh, respectively.

  • Victoria recorded the lowest average price at $45/MWh, followed by South Australia ($52/MWh) and Tasmania ($74/MWh).

• Transmission & Negative Prices:

  • Record-high negative pricing events occurred 23.1% of the time, affecting NSW, VIC, and SA.

  • Key transmission projects like VNI West, Project EnergyConnect, and HumeLink will play a vital role in lowering energy costs across the NEM.

• Coal generation fell by 19.5%, replaced by rooftop solar (+20.3%), gas (+14.4%), and battery storage (+1400%).

• WA set a new renewable contribution record of 46.4%, with a peak of 85.1%.

• Gas market shifts: East coast wholesale gas prices rose to $13.60/GJ, driven by record Queensland LNG exports.

The surge in renewable energy and grid-scale battery storage is reshaping Australia’s electricity market. As transmission infrastructure improves, the integration of low-cost, clean energy will continue reducing reliance on coal and stabilizing power prices.

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