The surge in renewable energy supply is reversing the spike in power prices, according to the latest Green Energy Markets report.
The July Renewable Energy Index has confirmed analysis by the Energy Security Board that wholesale electricity prices are forecast to almost halve in the next four years due to the addition of 7200MW of extra large-scale supply from renewable energy.
“Australia’s recent political chaos has been has been heavily influenced by politicians that claim increasing the amount of renewable energy in our power mix has been the cause of rapidly rising power prices,” the report said.
“It is actually the opposite and a simple case of supply and demand.”
The Index said prices began to rise upwards when large amounts of supply were withdrawn from the market, including the closure of Northam Power Station in South Australia, and the Hazelwood Power Station in Victoria.
“In the period leading up to these large power price rises investment in additional large-scale renewable energy supply had largely dried up as a result of Abbott Government threats to wind back the Renewable Energy Target,” the report said.
“It was only after prices began spiking upwards with the announced closure of Hazelwood that we saw significant commitments to construct new large-scale renewable energy supply.
“Power prices have since begun to decline.”
The report said this started in mid-2017 when the Queensland Government instructed generators to stop withholding supply that was pushing up prices.
“Prices have since continued to decline in anticipation of increasing amounts of renewable energy supply reaching construction completion and contributing power to the grid,” it said.