Australia's Main Grid Achieves Historic Renewable Energy Milestone, Matching Coal Contribution

Renewables Surpass Coal in National Electricity Market

Australia's primary power grid, the National Electricity Market (NEM), has reached a significant milestone, with renewable energy sources, including storage, providing more than half of its total electricity supply for the first time during the December 2025 quarter. This represents a notable increase from 46% in the corresponding period of 2024, as reported by the Australian Energy Market Operator (AEMO).

The achievement underscores a rapid transformation in Australia's energy mix, with clean energy sources now matching and, in some instances, surpassing the contribution of traditional fossil fuels like coal. The Wholesale Electricity Market (WEM) in Western Australia also demonstrated strong performance, with renewables accounting for an average of 52.4% of electricity generated over the same quarter, exceeding the NEM average.

Record Peak Renewable Penetration

The December 2025 quarter saw unprecedented levels of renewable energy penetration across Australian grids. The NEM recorded a peak renewable energy contribution of 78.6% during a half-hour period on October 11, 2025. Even more remarkably, Western Australia's main grid hit a new peak of 91.1% renewable energy on December 20, 2025. This record was primarily driven by significant contributions from wind and solar power, particularly rooftop photovoltaic (PV) systems.

Solar Power's Dominant Role

Solar power continues to be a cornerstone of Australia's renewable energy expansion. Over a recent seven-day period, solar contributed 30% of all electricity in the main grid, which encompasses the five eastern states and the ACT. During daylight hours, specifically between 9 am and 6 pm, solar met an impressive 59% of electricity demand. Small-scale rooftop solar systems played a substantial role, accounting for 37.6% of the total solar contribution during these peak daylight hours. Rooftop solar generation reached an all-time high of 4,407 MW in the fourth quarter of 2025.

Decline in Fossil Fuels and Impact on Prices

The surge in renewable energy generation has coincided with a significant reduction in the reliance on traditional fossil fuels. Coal-fired generation in the NEM fell to an all-time quarterly low in the December 2025 quarter, decreasing by 4.6% year-on-year. Gas-fired generation also experienced a substantial drop of 27%, reaching its lowest level since the fourth quarter of 2000.

This shift has had a tangible impact on electricity costs. Wholesale electricity prices in the NEM nearly halved, averaging AU$50/MWh in the December 2025 quarter. This represents a reduction of AU$39/MWh from the December 2024 quarter, a decline attributed by AEMO to the record renewable energy output and increased deployment of battery storage.

Battery Storage Bolsters Grid Stability

Battery energy storage systems have played a critical role in supporting the integration of higher levels of renewable energy. The December 2025 quarter saw average battery output nearly triple to 268 MW. Since late 2024, 3,796 MW of new large-scale battery capacity, with 8,602 MWh of energy storage, has been added to the grid. This expansion helps manage fluctuations inherent in renewable generation, contributing to grid stability and reliability.

Looking Ahead: Australia's Renewable Targets

These developments align with the Australian Government's ambitious target of achieving 82% renewable electricity nationally by 2030. The consistent growth in renewable energy generation and storage capacity positions Australia to further reduce emissions and transition towards a cleaner energy future.