Windy times in South Australia lower the wholesale electricity prices

On last Friday, 27 June 2014, wind generation in South Australia rose to match 100% of the state’s electricity demand early that morning.

According to data provided by the Australian Energy Market Operator (AEMO), wind generation was easily the leading electricity generating source in South Australia for almost the entire week as shown in the graph.

AEMO’s daily market price data shows that South Australia also had the lowest wholesale electricity price for any of the mainland National Energy Market for the first six days of that period.

This is the merit order effect – where wind farms underbid coal and gas fired electricity in the wholesale market due to their zero cost fuel, thereby lowering wholesale electricity prices.

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