Australia’s energy transition is accelerating and the latest data confirms it. In Q1 2025, renewables supplied 43% of electricity across the National Electricity Market (NEM)—a new record for the first quarter and a clear sign that the energy transition is gaining momentum.

This shift is driving changes in pricing, supply patterns and market participation. For commercial and industrial energy users, understanding the impact of the energy transition is essential to navigating cost, risk and opportunity.

The Energy Transition is Gaining Momentum

Australia's energy transition is far from a concept on the horizon. New figures from AEMO confirm record-breaking growth in renewable generation during the first quarter of 2025. Together, solar, wind and battery technologies are rapidly reshaping the supply mix, displacing coal and driving emissions reductions across the grid.

Key highlights include:

• Grid-scale solar output rose 10% year-on-year, averaging 2.38 GW—the highest Q1 average ever recorded.
• Rooftop solar continued its upward trajectory, delivering 3.78 GW on average—up 16% from Q1 2024.
• Wind generation climbed 18% to 3.5 GW, setting a new seasonal high.
• Battery output surged 86% to reach 98 MW, driven by new capacity entering the market.

These changes mark a structural shift in how Australia’s electricity is generated, priced, and consumed. Emissions intensity and coal output both hit record Q1 lows—clear indicators that the energy transition is progressing at scale.

Pricing Shifts Reflect a Changing Market

The energy transition is reshaping the dynamics of wholesale electricity pricing across the National Electricity Market. As renewable generation continues to scale, traditional pricing patterns are breaking down—creating new risks and opportunities for energy users.

In Q1 2025:

• Negative or zero prices occurred in 18% of dispatch intervals, driven by strong solar and wind output during periods of low demand
• Renewables frequently set the market price, with solar and wind averaging $26/MWh
• Coal, hydro and gas set significantly higher prices—$84, $123 and $151/MWh respectively
• Emissions intensity dropped to 0.59 tCO₂-e/MWh, reflecting the accelerating shift away from fossil fuels

While lower daytime prices present an opportunity for some, they also increase exposure to volatility—particularly during peak periods when renewables drop off and prices rise. Businesses can no longer rely on flat pricing assumptions or outdated procurement strategies.

At Utilizer, we help our clients navigate this complexity, offering energy insights and commercially driven procurement solutions that align with market movements. As the energy transition progresses, we work with you to stay ahead of change—ensuring your energy strategy is not just reactive, but resilient.

Batteries Strengthen Their Market Position

For years, we’ve been waiting for the commercial case for batteries to truly stack up. In Q1 2025, large-scale batteries reached record output levels, with new capacity entering the market and reshaping how energy is stored, traded and stabilised.

In Q1 2025, large-scale batteries:

• Earned 88% of their revenue through arbitrage, selling to the market in the evening when prices are higher
• Generated the remaining 12% by providing frequency control and other grid stability services

This dual role positions batteries as both market participants and enablers of reliability. They help absorb excess renewable generation and smooth out supply gaps—supporting price stability while reducing reliance on coal and gas. As more batteries are commissioned, expect greater flexibility in the market—along with more complex price signals.

What This Means for Your Business

The energy transition is actively reshaping how electricity is produced, priced, and consumed—and that has direct implications for your energy strategy.

To stay competitive and in control, businesses should consider the following:

• Review contract structures and timing
  With negative and zero-price intervals becoming more frequent, businesses have an opportunity to better align their procurement approach with periods of low-cost energy. Traditional contracting methods may no longer deliver the best outcomes—especially if they ignore price shape, flexibility or peak exposure.
  
• Plan for increased variability
  As more renewables enter the grid, daytime prices may soften while price volatility shifts to the shoulder and peak periods. This means increased exposure to cost spikes in the evening, particularly for operations with fixed or inflexible load. Demand response, load shifting, and onsite generation strategies should be reviewed.
  
• Stay ahead of policy, pricing and infrastructure developments
  Transmission constraints, battery economics, and regulatory shifts all impact market conditions. Businesses that actively track developments, particularly around network reform and capacity investment, will be better placed to respond and benefit.

At Utilizer, we support clients through these changes—translating market signals into tailored energy strategies that align with your operational needs and commercial goals. Speak to one of our expert energy consultants today.