Electricity costs: Renewables beat fossil fuels
A joint CSIRO & AEMO study
Electricity from new generators:
Renewables with storage is cheaper than coal & gas.
An authoritative joint CSIRO and AEMO study examined the costs of building new electricity generators in Australia. They considered all technologies and concluded that building new solar and wind generators were the cheapest options, even when including the added cost of energy storage. These solar and wind options are cheaper than new coal generators even when coal is subsidised by excluding any cost for carbon emissions.
As storage has been included in the costing of these renewable generators, they would be able to provide electricity when it is needed, “dispatchable electricity” or “firmed renewable electricity”.
CSIRO / AEMO research report: Annual update finds renewables are cheapest new-build power (CSIRO and AEMO: December 2018)
CSIRO / AEMO study says wind and solar clearly cheaper than coal
(Renew Economy, 21 Dec 2018)
*** About AEMO: The Australian Energy Market Operator worked with the CSIRO to produce the above report. AEMO is responsible for the daily running of Australia’s largest gas and electricity markets and power systems. AEMO makes minute by minute decisions to balance the Australian National Electricity Market, provides planning, forecasting and data for our power system. For example, their website shows a graph of the 30-minute spot-price for electricity in each state over the last 36 hours. (www.aemo.com.au )
*** About CSIRO: The Australian Commonwealth Scientific and Industry Research Organisation is Australia’s leading scientific research organisation. (www.csiro.au)
Renewable energy costs continue dropping
Renewable electricity is cheapest & getting cheaper fast
- Renewable energy costs have decreased, and will continue to decrease, as more renewable generation is built, and as the technology continues improving.
- The price of solar PV modules has dropped about 80% over ten years. Allowing for compounding, this is 15% a year.
- The price of wind turbines has also dropped about 35% over ten years, i.e. 4 % per year.
The International Renewable Energy Agency (www.irena.org/costs)
Bloomberg analysis Nov 2018
For cheap electricity – More renewables
- The cost of electricity
- from new wind and solar generators
- including a cost for capital spending
- is cheaper than
- from black-coal generators
- including a cost of coal set at the export price
- excluding a cost for capital, and
- excluding a cost for carbon emissions
Bloomberg New Energy Finance analysis (BNEF, 2018) indicates the increased cost of electricity from black-coal in NSW and Queensland is the main factor in power prices increases. The high export prices for coal have increased the costs to Australian generators.
So, based on the export price of black coal, it is now cheaper to build a new solar or wind plant than running the black-coal generators in NSW or Queensland.
The costs of electricity from wind and solar, which include costs for building the generators, is lower than the cost of electricity from old black-coal generators that do not include any cost for building the generator.
(The age of cheap coal power is over for Australia says BNEF: Renew Economy, 8 May 2019)
(New wind and solar now as cheap as existing coal : Climate Council: 6 Dec 2018)
(Why coal, and not renewables, is the root cause of surging Australia power prices: Renew Economy, 3 Dec 2018)
(The stunning wind solar and battery costs the coalition refuses to accept: Renew Economy: 23 Nov 2018)
*** About Bloomberg New Energy Finance: BNEF is a leading provider of primary research on clean energy, advanced transport, digital industry, innovative materials, and commodities ( https://about.bnef.com/about )
New wind and solar now cheaper than existing coal
Snowy Hydro will contract to sell firm renewable electricity for under $70/MWh.
Infigen Energy expects to sell firm renewable electricity for between $54 and 67/MWh.
Most black coal generators now need these prices just to cover the cost of the coal they burn and this does not include any allowance for:
. the capital costs of building the plant
. plant maintenance costs, and
. the cost of carbon emissions from burning the coal.
AGL runs the ancient Liddell coal generator. AGL says if they kept Liddell running, they would have to charge over $ 100 / MWh.
(Taylor has failed on energy prices lets hope he does better on emissions: Renew Economy 27 May 2019)
(Infigen buys its first gas plant to support more cheap renewable :Renew Economy: 23 May 2019)
*** About Infigen Electricity: Infigen is an electricity generation and retailing company in Australia. It owns a lot of wind generators. ( www.infigenenergy.com )
*** About Snowy Hydro Limited: Snowy Hydro is an electricity generation and retailing company in Australia. It owns the Snowy Mountains Hydro-electric Scheme with its hydro-electric power stations, dams and tunnels. The company is owned by the Australian Federal government. ( www.snowyhydro.com.au )
*** About AGL: AGL is an electricity generation and retailing company in Australia. ( www.agl.com.au )
Lazard Report: Nov 2019
(Lazard: Wind & solar now match even the marginal costs of coal power: Renew Economy: 8 Nov 2019)
*** About Lazard: It is a global financial advice & asset management company
Electricity costs: July 2019
- Coal fired-power station: $140 per Megawatt-hour
- Nuclear: $200 per Megawatt-hour
- Wind: $44 per Megawatt-hour
- Solar: $50 per Megawatt-hour
(Queensland says wind and solar less than 50 dollars per megawatt-hour: Renew Economy: 29 July 2019)
The electricity from fossil fuels is subsidised
Renewable electricity cheaper than subsidised fossil electricity
The Coalition federal government has a “Climate Solutions Fund / Emissions Reduction Fund”. They have just added 2 billion dollars to this fund so it can fund projects to reduce carbon dioxide emissions.
We have paid some projects $16 a tonne of carbon dioxide to reduce emissions.
(So what is the current Australian carbon price?: RepuTex: 18 March 2018)
As the carbon dioxide from burning fossil fuels to generate electricity is negating this expenditure, we should increase the cost of electricity from fossil fuels to reflect this government expenditure. Fossil fuel electricity prices are not increased to allow for these emissions, so they are subsidised prices.
Fossil fuel use is also being subsidised as they are not charged for their emissions of heavy metals and air pollutants.
Renewable energy has to compete against subsidised fossil fuels.
Also, See (https://www.smh.com.au/national/sunny-side-up-australia-can-seize-a-climate-of-opportunity-20191031-p536cr.html)
Strange Coalition claims about electricity costs
The Australian Federal Coalition parties are both pushing hard for new coal electricity generation, and claiming that they are going to bring down the cost of electricity. It is amazing that they can take this stance when it is contradicted by key players in the industry and authoritative Australian studies.
Updated 3 Nov 2019