A sharp increase in battery generation and growing renewable energy capacity continued to reshape the electricity system in early 2025, according to the Australian Energy Market Operator’s (AEMO) Quarterly Energy Dynamics report for the March quarter.
Battery output across the National Electricity Market (NEM) jumped 86% compared to the same period in 2024, reaching a new quarterly high. This was backed by a 10% rise in grid-scale solar generation and an 18% increase in wind power. Rooftop solar also grew by 16%, helping push overall renewables to 43% of the NEM supply mix for the quarter.
In New South Wales, the increase in distributed solar led to a new minimum operational demand record of 2,718 megawatts (MW), the lowest on record for the state. Overall operational demand in the NEM dropped slightly, down 0.8% to an average of 21,380 MW, despite underlying demand across the market reaching a new first-quarter record of 25,162 MW.
“These minimum demand records were largely attributable to growth in rooftop solar, with the NEM, as a whole, reaching a new Q1 record of 11,680 MW,” said AEMO Executive General Manager Policy & Corporate Affairs, Violette Mouchaileh.
The report also noted that the growing presence of batteries and renewables on the grid led to more frequent negative pricing events, especially in northern parts of the NEM such as NSW and Queensland. Grid-scale solar and wind set the price in 15% of trading intervals this quarter, up from 10% in the same quarter last year.
“Additionally, the frequency of negative pricing increased during the quarter, particularly in the NEM’s northern regions, which was largely attributable to grid-scale solar and wind setting prices more often,” Ms Mouchaileh said.
Coal-fired power availability continued to fall. Black coal output dropped by 3.2% to average 10,269 MW across the NEM, while brown coal fell 6.7% to 3,429 MW. Despite this decline, coal remained a large part of the NSW generation mix. However, higher renewable supply helped dampen price impacts from coal generators, whose marginal offer prices increased to $84 per megawatt hour (MWh), up from $71/MWh a year ago.
In NSW, wholesale electricity prices remained relatively steady, averaging $88/MWh—just 1% above the same time last year. Lower volatility and strong renewable availability helped hold prices in check despite higher-priced black coal bids.
“Upward forces in coal and hydro prices were largely offset by downward pressures from higher renewable energy availability and fewer extreme price volatility events this quarter,” Ms Mouchaileh explained.
Across the NEM, total electricity sector emissions dropped 5.1% year-on-year to 27.4 million tonnes of carbon dioxide equivalent, with emissions intensity falling 4.4% to 0.59 tonnes per megawatt hour. This was directly tied to the shift away from coal and gas, and the increase in renewable supply.
The impact of this transition was also visible in the gas market. While demand dropped 2% across the east coast—driven by lower gas-fired generation and slightly reduced LNG exports from Queensland—wholesale gas prices still reached a new Q1 high at $13.26 per gigajoule (GJ). Queensland LNG exports remained the largest share of gas use, but slight reductions in volume allowed more gas to flow into the domestic market, helped by higher Victorian production.
In Western Australia, similar patterns emerged. Battery output more than tripled, renewables made up 41.6% of the supply mix, and emissions intensity reached new lows.
“The higher renewable and battery generation combined with lower coal-fired power output resulted in a Q1 record low in emissions intensity, which was 5.7% below the same period last year,” said Ms Mouchaileh.
In both the east and west of the country, the trends point to continued growth in renewables and batteries. For NSW, this means more variability in daily demand patterns, growing rooftop solar output, and a shifting role for traditional coal plants.
