In the last decade, the rapid decline in deployment cost of variable renewable energy (VRE) generation capacity has given renewables an advantage over fossil fuels for new builds as highlighted in ‘Renewable Power Generation Costs in 2020’ report from the International Renewable Energy Agency (IRENA). In the report, Australia has seen large falls in ‘Levelised cost of electricity’ (LCOE) over the past decade, especially in solar PV – including grid-scale, residential and commercial PV systems. As more VRE enters the market, price cannibalisation is inevitable as we transition from the fossil-based energy market.
This ‘Chart of the week’ examines the captured price band by the percentage of wind and solar generation volumes for the National Electricity Market (NEM) over the last four financial years. Comparing against increasing VRE capacities over the years, we provide commentary on the impact of VRE connection rate on the captured price trend.