Australia’s accelerating shift from coal-fired power to clean energy is stoking volatility in its power markets and raising concerns for large businesses, according to BHP Group, the country’s most valuable company.
The main National Electricity Market, which covers about 80% of Australia’s demand, is experiencing the largest fluctuations in daily electricity prices globally, driven by issues including unplanned outages of coal plants and the integration of rooftop solar, according to Rystad Energy.
“It’s a nervous time to be a major consumer of electricity on that particular grid,” Huw McKay, BHP chief economist, said Tuesday in an interview with Bloomberg Television.
Following its acquisition of OZ Minerals, BHP is seeking to lift copper output from mines in South Australia, and wary over the unpredictability in the state’s energy system as work continues on constructing an interconnector linking the region to neighboring New South Wales, according to McKay.
“We are anticipating a period of heightened volatility,” he said.
South Australia had the country’s highest wholesale electricity prices in the three months to September 30, averaging A$92 ($58) per megawatt hour compared to a national figure of A$63 per megawatt hour, according to the Australian Energy Market Operator.