Wind power in Australia

12 February 2015

Did you know, that after hydropower, wind power is the second biggest contributor to Australia’s renewable energy supply?

Wind power actually generates nearly a quarter of all the renewable electricity in the National Electricity Market (NEM).1  

This proven technology now makes up around four percent of Australia’s National Electricity Market and its contribution is likely to increase in the coming years.

diagram elect gen aust nem wind

Electricity generation in Australia's National Electricity Market2

This increase will likely be due to the Renewable Energy Target (RET), which has the goal of sourcing 20 percent of Australia’s electricity from renewable energy sources by 2020. Because wind energy has a relatively low cost and is proven technology, when compared with other renewable energy sources, it’s likely to be the main type of electricity development delivered under the RET. 

At the end of 2012, there was about 2,200 megawatts of wind generation capacity in the NEM with roughly another 1,800 megawatts of wind capacity under construction.3

If no other technologies contribute to the RET, many billions of dollars of private sector investment will be required to deliver about 8,000 megawatts of additional wind generation capacity. This is roughly equivalent to four times the wind capacity that was in place at the end of 2012. 

Assuming that each new wind turbine has a capacity of 3 megawatts, this translates to an extra 2,600 wind turbines that need to start operating by 2020. 

The cost of wind energy

While wind energy is becoming more competitive, it’s still more expensive than coal and natural gas-fired power stations which currently supply around 85 percent of the electricity in Australia.4 As a result, the RET effectively works to subsidise wind power and other renewable energy technologies. 

The costs associated with meeting the RET are paid by all customers via costs they pay in their standard electricity bills. The cost of the RET is not detailed separately on the bills, rather it is included in the tariff charged.

The New South Wales Independent Pricing and Regulatory Tribunal estimates that, assuming a typical household consumes 7 megawatt hours of electricity each year, the RET adds up to $100 to the household’s electricity bills annually.5 This amount is expected to increase as 2020 approaches. 

More wind, anyone?

You can choose to get more of your electricity from wind and other renewable energy sources by buying GreenPower. It’s a voluntary government program that allows energy retailers to buy renewable energy, including wind energy, above and beyond the RET on behalf of their customers. 

If you’d like to find out more about GreenPower and Origin’s range of green energy options, visit here

Read more about how wind energy works.

  1. With analysis from Origin Energy, National Electricity Market generation data is based on the State of energy market report 2014, Australian Energy Regulator, p.25-28.
  2. With analysis from Origin Energy, National Electricity Market generation data is based on the State of energy market report 2014, Australian Energy Regulator, p.25-28.
  3. Data for the generation capacity of wind farms in operation and under construction are based on Origin’s analysis of publicly available generation and project development information as at January 2013.
  4. Bureau of Resources and Energy Economics, 2012, The Australian technology energy assessment, Canberra, p. 86, viewed 23 April 2013.
  5. Independent Pricing and Regulatory Tribunal 2012, The impact of green schemes on regulated electricity retail prices from 1 July 2012, 13 June 2012, Independent Pricing and Regulatory Tribunal, Sydney.