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Report Finds Renewable Energy is Cheaper Than Gas and Coal in Australia
In the wake of soaring temperatures that made it impossible for some residents in the Australian outback to pump gas, good news is finally coming to the energy market Down Under. A report by Bloomberg New Energy Finance (BNEF) found that unsubsidized renewables are now cheaper sources of electricity than newly built gas or coal plants. The team also projected that new wind farms could supply electricity at $80 MWh compared to $143 MWh for coal and $116 MWhr for new gas-fired plants. The rates account for carbon emissions, but even without CO2 numbers wind would still be 14% cheaper than new coal and 18% cheaper than new gas.
Australians now have figurative proof to show that renewable energy is more cost-effective than coal or gas. While they still do need some subsidizing to compete with existing fossil fuel based plants, new gas-fire and coal is so expensive that the country’s largest banks and lenders are wary to finance them. Coal in particular requires a substantial risk premium due to PR damage from releasing CO2 emissions. The expansion of Australia’s liquefied natural gas market has driven domestic prices upwards. Carbon prices taxes further add costs to new gas and coal plants, substantially increasing the price tag of plants facilities over their lifetimes.
“The fact that wind power is now cheaper than coal and gas in a country with some of the world’s best fossil fuel resources shows that clean energy is a game changer which promises to turn the economics of power systems on its head.” said chief executive of Bloomberg New Energy Finance, Michael Liebreich.
BNEF’s researchers believe that by 2020, large PV solar plants will be cheaper than coal or gas when carbon prices are taken into account. Ratch Australia, a power company that owns both renewable and fossil fuel interests, states that solar was already at $120 MWh and dropping. BNEF concludes that it is unlikely that new coal-fired power stations will be built in Australia, and that the economy is most likely to be supported by renewables in the future. In the coming decades, as coal prices rise and technology makes strides in dealing with the intermittent nature of wind and solar, Australia could be one of the first nations to be sustained primarily on renewable energy.
Via Clean Technica
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