Record Wind and Solar Curtailment Reaches 59% in South Australia
In the last quarter of 2025, Australia achieved remarkable levels of renewable energy production, yet the proportion could have been significantly higher were it not for economic factors and network restrictions affecting large-scale wind and solar generation, which themselves also reached unprecedented levels.
The Australian Energy Market Operator (AEMO) reported a record average of 1,312 MW of economic “offloading” of wind and grid-scale solar generation throughout December, marking the highest quarterly average documented and doubling the previous record set in the same quarter the year before.
Impact on Solar and Wind Output
Grid-scale solar power was most severely impacted, with an average of 18 per cent of its potential output not utilised due to economic reasons such as negative pricing. This was particularly evident in New South Wales and Queensland, with South Australia facing the steepest offloading levels.
AEMO revealed that in South Australia, economic offloading for the few solar farms operating there reached an astonishing 59 per cent of potential output in the December quarter. This phenomenon occurs as rooftop solar installations successfully meet the majority, and sometimes all, of the daytime energy demand, driving wholesale prices down into negative numbers.
When prices dip into the negatives, solar farms are often compelled to shut down their operations, contingent on their power purchasing agreements, since they effectively have to pay to generate electricity.
Coal-fired power generators tend to be amenable to these conditions. They frequently contribute to the drop in wholesale prices, reasoning that it is cheaper to pay others to take their generated power than to switch their units off and on again. However, companies like AGL are testing new strategies like “two shifting” of coal plants to adapt to these challenges.
Among the solar facilities most affected by offloading in South Australia are the substantial 220 MW Bungala plant, contracted by Origin Energy, the Tailem Bend facility contracted by Snowy Hydro, and the Port Augusta Renewable Hub, which features 100 MW of solar power alongside over 200 MW of wind energy.
Addressing Economic Offloading
To combat the issue of economic offloading, expanding network capacity emerges as a crucial solution. Enhancing this infrastructure would allow for greater amounts of surplus energy to be exported to areas experiencing high demand. Similarly, the increasing adoption of home battery storage systems and larger battery installations, which can draw power from the grid when prices are low, will also contribute positively.
The rise in offloading instances is a significant factor behind the trend of presenting nearly all new solar projects as solar-battery hybrids, spurred by regulatory changes and the rapidly falling costs of battery storage. This evolution enables these hybrid systems to effectively compete during evening peak demand periods.
AEMO’s Quarterly Energy Dynamics report further indicates that the economic curtailment of wind energy also more than doubled, averaging 695 MW during the quarter, reaching a record high. This accounted for 15 per cent of average wind availability, an increase from 10 per cent the previous year. The curtailment was most severe in Victoria, where it now constitutes over 25 per cent of available wind output; this surge has been attributed to network limitations restricting wind exports to New South Wales and Tasmania.
Network companies or market operators often impose constraints that can limit both wind and solar output. In line with AEMO’s findings, the average curtailment of grid-scale solar generation due to network constraints rose from 176 MW in the fourth quarter of 2024 to a historic high of 213 MW in this most recent quarter, predominantly due to issues in New South Wales. However, as a proportion of potential output, network-induced curtailment actually declined slightly to 6.3 per cent from the previous 6.5 per cent.
Conversely, wind curtailments from network constraints remained relatively stable at 37 MW, with its share of total potential output decreasing marginally to 0.8 per cent.
Record Outputs Despite Challenges
Despite these significant increases in economic offloading, both wind and solar outputs reached record highs during the quarter, owing to the commissioning of new facilities and more favourable weather conditions.
AEMO noted that grid-scale solar output across the National Electricity Market (NEM) achieved a new quarterly high of 2,535 MW, with overall availability climbing by 628 MW, thanks to new solar installations at farms including Stubbo, Wollar, Culcairn, Walla Walla, and Aldoga.
In a noteworthy statistic, Victoria recorded the highest average capacity factor at 34 per cent, likely due to the comparatively minimal impact of rooftop solar in relation to the grid there, unlike in other states.
Wind capacity also saw an increase, with contributions from new wind farms such as Golden Plains, MacIntyre, Clarke Creek, Goyder South, and Ryan Corner, alongside enhanced output from existing sites attributed to improved wind conditions.
AEMO further highlighted that Tasmania achieved the highest average capacity factor, standing at 49 per cent—an increase of 7.7 percentage points year-on-year—while Queensland experienced a decline of 2.8 percentage points, bringing its capacity factor down to 31 per cent.
