Solar Farms Face Output Cuts Amid Energy Flow Changes, Batteries Thrive
Australia’s large and renowned solar farms have experienced significant reductions in their output ratings according to the latest evaluation of grid congestion and energy flows. The recent assessment of marginal loss factors (MLFs), which indicate energy losses between generation points and regional reference nodes, has shown cuts exceeding five per cent for multiple significant solar projects for the 2026/27 period, although some smaller projects have reported minor gains.
In contrast, several sizeable battery initiatives are reaping the benefits of these changes, enjoying improvements in input ratings and increases in output ratings, thus enhancing their operational economics.
The Impact of Marginal Loss Factors
The MLF ratings can often feel unpredictable, influenced by the emergence of new industries in certain regions, the closure or establishment of competing generators, and the construction of additional power lines. Nevertheless, careful planning does have its advantages.
Recently, the Australian Energy Market Operator (AEMO) published its draft assessment for the 2026-27 financial year. It highlights mostly minor changes across the majority of generation and load categories, with the most significant setbacks affecting solar farms situated in the south-west of New South Wales and in central and northern Queensland.
Factors Behind the Changes
AEMO notes that in Queensland, these alterations stem mainly from newly added generation capacity in central Queensland and heightened output from existing generators, leading to increased energy flowing south towards the regional nodes, which introduces more competition.
This shift has adversely impacted solar facilities like Lilyvale, Longreach, Kidston, Haughton, and Hamilton, with many seeing reductions in their MLF ratings of up to five per cent.
On the flip side, scheduled generation outages in south-west Queensland have resulted in slight boosts to the MLF ratings of certain facilities in this region and parts of northern New South Wales.
Particularly affected are solar farms in south-west New South Wales, where over a dozen have seen their MLF ratings slashed by more than five per cent. This group includes Walla Walla, Wagga North, West Wyalong, Junee, Hilton, Griffith, Glenellen, Corowa, Culcairn, Limondale, and Sunraysia solar farms – with the latter two facing significant losses, as their MLFs hover just above 80, indicating that one-fifth of their potential output is lost during transmission.
Understanding the Drivers of Change
AEMO attributes these adjustments to a mix of new generation capacity, variations in energy flows on main transmission lines between Victoria and New South Wales, as well as the introduction of a new interconnector linking South Australia with New South Wales and more localised generation sources.
Understanding the patterns of energy flow is crucial, particularly since solar energy production coincides with peak load periods, substantially increasing competition for access to necessary energy regions. By contrast, wind energy flows remain stable as they primarily generate during evening hours.
AEMO’s report affirms that this year’s draft MLF outcomes are indicative of an energy sector in transformation, primarily driven by new renewable generation and storage projects, alongside shifts in dispatch timing and transmission advancements like Project EnergyConnect Stage 2.
Despite these shifts, year-on-year fluctuations within MLFs remain in line with historical averages, even in regions experiencing the most significant alterations, such as northern Queensland, south-west New South Wales, and northern Victoria.
Insights from Victoria
In Victoria, the variations in MLF ratings are less pronounced, with solar farms like Numurkah, Glenrowan, and Girgarre experiencing declines, whereas Carwarp and Bannerton in the north-west have seen improvement due to enhanced access to the New South Wales grid through the new linkage from South Australia.
The most significant winners in these developments are the Riverina and Darlington Point batteries, operated by Edify Energy, along with the new Limondale battery, which is the country’s first eight-hour storage facility. These projects have witnessed notable decreases in their input MLFs and considerable increases in output MLFs.
For example, the Limondale battery has seen its input rating drop from 0.9280 to 0.8544 while its output rating has surged from 0.9237 to 0.9503. This improvement can largely be attributed to its strategic management of charging and discharging times.
The Shift Towards Hybrid Projects
This trend is encouraging on multiple fronts and highlights the demand for storage solutions in areas grappling with grid congestion alongside significant solar production. The clear message emanating from these developments is that solar farms must integrate substantial battery systems. This trend underscores the growing momentum towards solar-battery hybrid projects, enabling batteries to capture excess solar generation behind the meter, which does not negatively affect MLFs.
Ultimately, the future looks promising, as these developments indicate that MLFs could actually improve over time, given that batteries have the flexibility to choose their discharge timings – typically coinciding with periods of high demand and price peaks when grid traffic is relatively light and unimpeded.
