Wind’s future in the Australian and GB energy markets

Last week we published our latest insight paper – Wind in the Australian and Great British energy markets ­– which examines the outlook for wind in both the Australian and Great British (GB) markets and how it is being shaped by market design and infrastructure.

The key findings of the report are:

  • Both markets will see growth; however, both markets will have their challenges
  • The characteristics of the GB market means it will see more significant growth than Australia, with price cannibalisation a consequential risk, particularly for subsidy-free wind
  • There are excellent opportunities for wind in Australia if obstacles relating to volatile drivers of revenue can be navigated and addressed

Discussing the research in the insight paper, Gareth Miller CEO of Cornwall Insight said, “Wind will play different roles in the future of both Australian and GB energy markets, with GB likely to see a much greater expansion of its already extensive wind capacity base. However, Australia also presents significant opportunities for wind developers, particularly in certain regions.”

The insight paper found that the GB wind market has some distinct advantages over its Australian counterpart, as there are no equivalent risks around changes to network loss factors for investors to deal with. Coupled with, a greater network resilience and system services that are already beginning to explore the value wind can bring to delivering a smart, low carbon and flexible system, makes it a perfect breeding ground for wind projects.

Australia, on the other hand, faces a difficult challenge of loss factors to contend with. System operators have also been directing thermal plant to meet system needs of wind variability, even if such plants are out of the money, which has the potential to distort energy-only markets. Wind is also often being built at the periphery of a less resilient network not always as well interconnected as it could be.

However, some common themes link the two countries “wind capacity and output, and the challenges and opportunities this creates in terms of integration with markets originally designed around centrally connected, thermal power stations”, Gareth pointed out.

Going further Gareth explained how in both markets’ investment flows will rely on trying to predict uncontrollable revenue influencers either in the form of power prices or regulatory factors that can influence a wind projects ability to capture them.

It is not just the markets that will that have similar characteristics with successful players in both markets sharing common ground as well. These include “deploying strong quantitative estimation of future cash flows and secondly, an ability to discern and link up the most significant changes emerging from detailed and dynamically changing policies and regulations. In both cases, and Australian and GB markets, Cornwall Insight is here to help wind companies thrive and succeed,” Gareth explained.

If you would like to download a copy of the insight paper for free, please click here.

Related thinking


New South Wales REZ outlook

From Cornwall Insight Australia's Energy Market Perspective Our quarterly Energy Market Perspective contains an analysis of indicative capacity at REZ zones throughout the NEM.  The following assessment for NSW is from our latest edition. Request Energy Market Perspective call back The strategic development of Renewable Energy Zones (REZs) in New...


Capacity Investment Scheme boosted from 6GW to 32GW

From Cornwall Insight Australia's Energy Market Alerts service Last Friday, the Commonwealth announced a major boost to the Capacity Investment Scheme, with the scheme now expected to deliver 32GW (combination of 9GW firming capacity and 23GW renewable generation) – up from 6GW. Cornwall Insight Australia has released an Energy Market...


What are Australia’s emissions reduction targets?

From Cornwall Insight Australia's Energy Market Alerts service Energy laws have now been amended to incorporate an emissions reduction objective alongside the other objectives. The list of targets that the market bodies will need to consider is listed in a separately published Targets Statement. The targets currently listed cover both...


Energy prices tumble in October

From Cornwall Insight Australia’s NEM Market Analysis report With over 700 GWh of rooftop PV added to the NEM since October last year, records were again set in NEM minimum demands along with a high instantaneous renewable penetration within the grid of 71.4%. Once again, the month’s main story was...


Emissions intensity drops for October 2023

From Cornwall Insight Australia’s NEM Market Analysis report This October saw a 12.6% reduction in total emissions (accounting for -1.18 Mt CO2-e reduction) as solar and wind generation has increased significantly. The reduction in emissions may continue with the arrival of Fly Creek and Rye Park wind farms expected soon...


Latest Marginal Loss Factor (MLF) forecasts

Cornwall Insight Australia recently launched our Marginal loss factor (MLF) curve subscription insight service. The MLF curve provides future projections of MLF throughout the NEM, allowing clients to be better informed of likely MLF trajectories for both current projects and be able to benchmark MLFs for projects under development. The...


Latest FCAS Q3 price forecast released

Cornwall Insight Australia released the latest Frequency Control Ancillary Service (FCAS) price curves for Q3 2023 on 21 September 2023. Available to download is an excerpt reporting the headlining power price trends from the FCAS insight service. NEM FCAS markets in Q1 and Q2 of 2023 saw lower overall costs,...

Commercial and market outlook

NEM power price trends | Q3 2023

Cornwall Insight Australia has released our latest NEM Benchmark power curve (BPC) for Q3 2023 to our insight service subscribers. We have released a free excerpt, which you can access below. The future of the energy transition requires substantial new generation, which means increasing the size of the skilled workforce, speeding...