Annual Market Report Part 3 - Generation and Demand

Jay Ros -

The Australian Energy Market experienced significant stress and upheaval in 2022 during the energy crisis. In 2023, the market continued to face change and challenges on multiple fronts resulting in large shifts in demand and changes in generation. This final instalment of our 2023 Annual Market Report highlights many of these events and outcomes.

1.0 Overview

The Generation and Demand highlights for 2023 are:

  • New Generation connections in the NEM totalled 2,652MW which was the highest in three years thanks to significant additions from new wind generation and battery storage
  • Rooftop Solar PV continues to grow at an increasing rate. New Rooftop solar capacity grew by 14% in 2023 to 18,853MW. During 2023, NSW surpassed QLD for the largest cumulative rooftop solar capacity in the NEM
  • Generation from fossil fuels in the NEM continued to decline during 2023, as generation from renewables increased to just over 35% of total generation during 2023, including Rooftop Solar PV generation which counted for almost 10% of all generation
  • Wind generation curtailment was a record high for VIC in 2023, while solar generation curtailment was at record levels for both VIC and SA
  • Total NEM emissions continued to fall in 2023, with the carbon intensity index falling from 0.64tCO2e per MWh in 2022 to 0.61tCO2e per MWh in 2022
  • Wind weighted price discount to the average spot price deteriorated for all regions in 2023 and was the worst on record for VIC, SA and TAS. For solar generation, the spot price discount was the worst on record for all regions during 2023
  • Interconnector flows were higher overall across the NEM during 2023
  • Snowy Hydro water storages remained at record high levels of up to 70% in 2023, while Tasmanian water storage maintained levels around 40% consistent with recent years
  • Average operational demand levels were lower in 2023 for all regions except QLD. All regions experienced higher maximum demand in 2023 and lower minimum demand levels. SA recorded low demand of -26MW in 2023
  • Lack of Reserve (LOR) notices were significantly lower than the record levels seen in 2022, but remained higher than historical levels
  • The general weather trend across the NEM during 2023 was for warmer temperatures, consistent with the arrival of El Niño