Record output from solar and wind generators is driving fossil fuels out of the electricity market, pushing down power prices and cutting emissions faster than the government’s projections.

Figures published in a new report by research group EnergyQuest point to record wind and solar output in the September quarter, alongside record-low output from fossil fuel generators.

As a result, prices are falling in South Australia, Tasmania and Victoria – where solar and wind resources are abundant – but rising in coal-reliant New South Wales and Queensland.

The report also found that South Australia was leading the world in renewable energy output – supported by a technology breakthrough that has reduced the state’s reliance on gas-fired generators.

“SA hit 76 per cent average reliance on renewables, not just for a day but for the whole month of November,” EnergyQuest principal Graeme Bethune told The New Daily.

“That’s probably a world first.”

Forcing fossil fuels out of the market

SA’s reliance on renewables was up from 66 per cent in September, with the increased uptake driving more fossil fuels out of the market.

The extra supply of renewables meant there was less need for gas-fired power to bridge the gap in output when the sun didn’t shine and the wind didn’t blow.

The relative dependence on gas-fired power in SA fell from 33 per cent in September to 24 per cent in November.

And the surge in renewables is having a big effect on power prices – with prices actually turning negative on good days for solar and wind.

“[On Monday], electricity prices in SA are negative $2.28 [a megawatt hour] and in Victoria negative $2.41,” Mr Bethune said.

Those negative prices result from wind and solar providing SA’s total needs as well as exporting the excess interstate to Victoria.

It means the fossil fuel generators have to actually pay energy retailers to take their power, which results in a loss.

But the renewable generators, whose cost of production is zero and whose contribution to the system is prioritised, suffer negligible losses.

Higher prices in NSW and Qld

Meanwhile, in NSW and Queensland, which rely heavily on coal and have been disrupted by a generator explosion earlier in the year, prices were “a bit above $50,” Mr Bethune said.

The effects of the rise in wind and solar in SA and its nearest neighbour and fellow wind powerhouse Victoria are demonstrated in the chart below.

Prices in Victoria, SA and hydropower giant Tasmania are falling through spring.

But prices are rising in the more coal-reliant northern states.

Tech breakthrough boosts renewables

A new technological development is helping to boost SA’s renewables output. The state grid operator “has now got synchronous condensers which maintain system stability,” Mr Bethune said.

Those devices are high-speed spinning machines that can quickly address variations in generation (i.e. when the sun doesn’t shine and the wind doesn’t blow).

Their introduction has reduced the energy regulator’s reliance on gas generators to provide back-up power.

The Australian Energy Market Commission (AEMO) expects a massive flood of new renewables into the market over the next three years – a rush that is expected to push down prices by an expected 6 per cent, or $77 a year, per household.

And although the 1680-megawatt Liddell coal station will close in NSW in that time, a further 5500 megawatts of large-scale renewables, along with 4130 megawatts of rooftop solar, will more than cover the fall in output caused by Liddell’s closure.

Emissions targets in reach

Such is the power of the renewables revolution that “the Coalition is likely to significantly overachieve on their emissions reduction target of 26 to 28 per cent by 2030,” Mr Bethune said.

The government has said it could reach 35 per cent by 2030 but will not commit to achieving it.

Labor, for its part, has pledged a 2030 target of 43 per cent.

“So there isn’t a huge amount of daylight between the Coalition and Labor,” Mr Bethune said.

Economist and council member with the Climate Council, Nicki Hutley, said the targets lack ambition and detail.

“The ALP target is plausible and reasonable and their targets on job creation look credible. But they’ve been silent on how they are actually going to reduce fossil fuels,” she said.

“Without costings, [the fossil fuels sector faces] the threat of border adjustments [carbon import taxes] or stranded capital, as plants become uneconomic before their planned life is over.”