ANNOUNCEMENTS
Australia's National Electricity Market (NEM) is rapidly transitioning from coal-based generation to a power system dominated by renewable energy, primarily solar and wind, in accordance with national and state net-zero emission targets. Among these, behind-the-meter (BTM) rooftop solar has increased dramatically, particularly in South Australia, which currently has one of the highest rooftop solar penetration rates in the world. This paper examines the structure and operation of the Australian NEM and assesses how large-scale solar energy adoption contributes to net-zero goals, using South Australia as a case study.
The study looks at changes to the generation mix, market design, and policy framework under the Integrated System Plan (ISP 2024). The results reveal that high rooftop solar penetration has significantly affected daily demand patterns, resulting in a distinct "duck curve" with low midday operational demand and considerable evening ramping requirements. This transition has increased the demand for adaptable resources like battery energy storage systems and fast-ramp generating.
The study also indicates a significant increase in negative wholesale electricity costs in areas with high solar output, particularly South Australia and Victoria. While negative prices reflect excess renewable generation and benefit consumers in the short term, they also raise questions regarding generator revenue and long-term market stability. Future forecasts indicate that further increase in rooftop solar may exacerbate these effects by 2050. The report concludes that achieving net-zero targets will necessitate coordinated governmental support, enhanced market design, and large-scale deployment of energy storage and grid support technologies to assure the NEM's stable and economically sustainable functioning.
