In just 27 years, this country’s renewable energy landscape has evolved almost beyond recognition. Its share of the national electricity market has skyrocketed from a mere 5% to greater than 40%. The shift towards renewable sources, particularly solar and wind power, has positioned Australia as a leader in the global energy transition. This rapid growth has caused a wave of trouble across the electricity system. One of the biggest problems is curtailment, where surplus energy generation is constrained or discarded due to lack of demand.
Solar energy has emerged as the dominant force in this transition, often generating up to half of the nation’s electricity supply at peak times. Today, that number is over four million households and businesses—nearly one third of all “small-use” customers. Today, Australia is in the midst of a massive renewable energy boom. It needs to address the problem of how to manage that unnecessary oversupply to ensure a sustainable energy future.
Record Renewable Energy Production
On October 11, renewable energy sources celebrated a historic victory. They even provided the majority of Australia’s electricity demand last Friday, at a staggering 78.6% just before midday! This achievement highlights not only the progress made in harnessing renewable resources but the challenges associated with managing that energy effectively. As we become more and more reliant on solar and wind power, the problem of curtailment grows ever more acute.
Especially in the shoulder seasons of spring and fall, solar production ramps up quickly. At the same time, demand is still weak. This mismatch is what leads to curtailment. Consequently, a number of solar farms along Australia’s eastern seaboard curtail up to 30% of their potential output due to excess generation. The economic impact of wastage is huge. That’s particularly the case for gas plants, which usually require high market prices to be able to operate profitably.
“Curtailment at its simplest is when an energy asset generates less than it would be capable of generating.” – Pete Tickler
The Australian Energy Market Operator (AEMO) understands these trends. They are out there, taking proactive measures to address the problems of oversupply and curtailment head on. More encouragingly, the Commonwealth is already doing something to put surpluses to better use. They’ll hold retailers accountable by providing households a minimum of three hours per day of “relief” electricity at no charge.
Future of Energy Storage
Australia is preparing to ramp up renewable energy in its electrical grid. Today, utility-scale battery storage is one of the most promising solutions for addressing curtailment. The country is expected to bring online 29 gigawatt-hours of utility batteries in the near future. Rystad anticipates more than 15.4 gigawatts of new battery capacity to be online in the next two years. These innovations are set to dramatically change the way we store and distribute energy throughout the country.
Once they are all fully operational, these batteries alone will produce an additional demand of 8.5 terawatt-hours per year. This new demand will be focused largely during the day. This new demand would go a long way to making up for some of the curtailment troubles we’re seeing right now across the system.
“The dynamics of the NEM are about to completely change, as 8 gigawatts of utility batteries … are set to be online in the next 12-18 months, mostly shifting energy from day to night.”
Industry insiders such as Tickler are sounding alarm bells that more solar farms are in the pipeline. Unlike today’s grid, they will likely be co-developed in tandem with battery storage from the outset. Powering the future, together This shift marks a winning recognition that a more integrated approach is necessary as we manage exponentially growing renewable energy production.
“Once all this capacity is commissioned, there will be 29 gigawatt hours of utility batteries operational. Assuming they cycle 0.8 times per day, that’s an additional 8.5 terawatt hours per year additional demand, presumably mostly during the middle of the day.” – Mr. Dixon
Australia’s advancements in small-scale solar and battery storage could draw considerable attention at upcoming international forums, particularly the UN climate summit COP30. The country has done an amazing job of getting there—more than 40% renewable energy penetration. This achievement reflects a deep commitment to sustainability and a desire to be ahead of the curve on addressing new challenges.
“There’ll still be solar farms built, lots of them, but they will be developed, co-located with battery storage from the get-go.” – Mr. Tickler
A Global Perspective
Even experts agree that curtailment is a necessary step on the path toward a greener energy system. Even with all these accomplishments, this challenge is still big. Dr. McConnell expressed a pragmatic view on this phenomenon:
There’s no question that policymakers and industry leaders alike are charting dangerous waters. They need to be much more proactive in seeking new ways to change public perceptions of energy use and development. Dr. McConnell stated:
“I think the general view is a modest amount of curtailment is … inevitable.”
This changing attitude towards energy is symptomatic of global paradigm shifts in environmental stewardship and sustainability.
“It can seem like a waste, but it’s not really a waste if it’s not worth anything.”
This evolving mindset around energy reflects broader trends in how societies are beginning to approach sustainability and resource management.
