Kim Nguyen, Head of Australia Foresight Group, addresses concerns over recent electricity spot pricing headlines, as well as debunking the view that they are caused by an oversupply coming onto the grid due to new renewable generators.
Kim points to the “swift action” of spot pricing compared to coal generators - one instance of which is not indicative of longer term pricing trends or supply-demand dynamics. She goes on to explain that renewable energy is resilient to negative pricing for several reasons, and is far better positioned to take swift action to changes in demand or price. In fact, she writes, “The occasional midday and afternoon gyrations in the spot price has less to do with extra capacity from renewable generators and more to do with an inability or unwillingness of coal generators to cycle down to meet demand.”
As Australia moves from ageing coal generators to renewables over the coming decades, Kim concludes “there is an opportunity to embrace lower cost and more flexible options that will provide Australians with lower energy prices. Renewable energy remains future-focused and investments in the sector will play a key role in our energy future”.
This article was published in Sydney Morning Herald, The Age, WA Today and Brisbane Times on the 2nd October 2019. Subscribers can read the full article here. Find out more about the Foresight Renewable Energy Infrastructure Fund here.